10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2018

OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Commission File Number 1-11758

(Exact Name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 1585 Broadway New York, NY 10036 (Address of principal executive offices, including zip code) 36-3145972 (I.R.S. Employer Identification No.) (212) 761-4000 (Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).    Yes ☒    No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer    ☒	Accelerated Filer  ☐
Non-Accelerated Filer       ☐	Smaller reporting company  ☐
(Do not check if a smaller reporting company)	Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of April 30, 2018, there were 1,770,260,439 shares of the Registrant’s Common Stock, par value $0.01 per share, outstanding.

QUARTERLY REPORT ON FORM 10-Q

For the quarter ended March 31, 2018

Table of Contents	Part	Item	Page
Financial Information	I		1
Management’s Discussion and Analysis of Financial Condition and Results of Operations	I	2	1
Introduction			1
Executive Summary			2
Business Segments			6
Supplemental Financial Information and Disclosures			14
Accounting Development Updates			15
Critical Accounting Policies			15
Liquidity and Capital Resources			15
Quantitative and Qualitative Disclosures about Market Risk	I	3	29
Report of Independent Registered Public Accounting Firm			39
Financial Statements	I	1	40
Consolidated Financial Statements and Notes			40
Consolidated Income Statements (Unaudited)			40
Consolidated Comprehensive Income Statements (Unaudited)			41
Consolidated Balance Sheets (Unaudited at March 31, 2018)			42
Consolidated Statements of Changes in Total Equity (Unaudited)			43
Consolidated Cash Flow Statements (Unaudited)			44
Notes to Consolidated Financial Statements (Unaudited)			45
1. Introduction and Basis of Presentation			45
2. Significant Accounting Policies			46
3. Fair Values			48
4. Derivative Instruments and Hedging Activities			57
5. Investment Securities			61
6. Collateralized Transactions			64
7. Loans, Lending Commitments and Allowance for Credit Losses			65
8. Equity Method Investments			67
9. Deposits			68
10. Borrowings and Other Secured Financings			68
11. Commitments, Guarantees and Contingencies			68
12. Variable Interest Entities and Securitization Activities			72
13. Regulatory Requirements			76
14. Total Equity			78
15. Earnings per Common Share			80
16. Interest Income and Interest Expense			80
17. Employee Benefit Plans			80
18. Income Taxes			81
19. Segment and Geographic Information			81
20. Revenues from Contracts with Customers			82
21. Subsequent Events			83
Financial Data Supplement (Unaudited)			84
Glossary of Common Acronyms			86
Other Information	II		88
Legal Proceedings	II	1	88
Unregistered Sales of Equity Securities and Use of Proceeds	II	2	89
Controls and Procedures	I	4	90
Exhibits	II	6	90
Exhibit Index			E-1
Signatures			S-1

i

Available Information

We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document we file with the SEC at the SEC’s public reference room at 100 F Street, NE, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for information on the public reference room. The SEC maintains an internet site, www.sec.gov, that contains annual, quarterly and current reports, proxy and information statements and other information that issuers file electronically with the SEC. Our electronic SEC filings are available to the public at the SEC’s internet site.

Our internet site is www.morganstanley.com. You can access our Investor Relations webpage at www.morganstanley.com/about-us-ir. We make available free of charge, on or through our Investor Relations webpage, our Proxy Statements, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (“Exchange Act”), as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. We also make available, through our Investor Relations webpage, via a link to the SEC’s internet site, statements of beneficial ownership of our equity securities filed by our directors, officers, 10% or greater shareholders and others under Section 16 of the Exchange Act.

You can access information about our corporate governance at www.morganstanley.com/about-us-governance. Our Corporate Governance webpage includes:

• Amended and Restated Certificate of Incorporation;

• Amended and Restated Bylaws;

• Charters for our Audit Committee, Compensation, Management Development and Succession Committee, Nominating and Governance Committee, Operations and Technology Committee, and Risk Committee;

• Corporate Governance Policies;

• Policy Regarding Corporate Political Activities;

• Policy Regarding Shareholder Rights Plan;

• Equity Ownership Commitment;

• Code of Ethics and Business Conduct;

• Code of Conduct;

• Integrity Hotline Information; and

• Environmental and Social Policies.

Our Code of Ethics and Business Conduct applies to all directors, officers and employees, including our Chief Executive Officer, Chief Financial Officer and Deputy Chief Financial Officer. We will post any amendments to the Code of Ethics and Business Conduct and any waivers that are required to be disclosed by the rules of either the SEC or the New York Stock Exchange LLC (“NYSE”) on our internet site. You can request a copy of these documents, excluding exhibits, at no cost, by contacting Investor Relations, 1585 Broadway, New York, NY 10036 (212-761-4000). The information on our internet site is not incorporated by reference into this report.

ii

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

Morgan Stanley is a global financial services firm that maintains significant market positions in each of its business segments—Institutional Securities, Wealth Management and Investment Management. Morgan Stanley, through its subsidiaries and affiliates, provides a wide variety of products and services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals. Unless the context otherwise requires, the terms “Morgan Stanley,” “Firm,” “us,” “we” or “our” mean Morgan Stanley (the “Parent Company”) together with its consolidated subsidiaries. We define the following as part of our consolidated financial statements (“financial statements”): consolidated income statements (“income statements”), consolidated balance sheets (“balance sheets”), and consolidated cash flow statements (“cash flow statements”). See the “Glossary of Common Acronyms” for definitions of certain acronyms used throughout this Form 10-Q.

A description of the clients and principal products and services of each of our business segments is as follows:

Institutional Securities provides investment banking, sales and trading, lending and other services to corporations, governments, financial institutions, and high to ultra-high net worth clients. Investment banking services consist of capital raising and financial advisory services, including services relating to the underwriting of debt, equity and other securities, as well as advice on mergers and acquisitions, restructurings, real estate and project finance. Sales and trading services include sales, financing, prime brokerage and market-making activities in equity and fixed income products, including foreign exchange and commodities. Lending services include originating and/or purchasing corporate loans, commercial and residential mortgage lending, asset-backed lending, financing extended to equities and commodities customers, and loans to municipalities. Other activities include investments and research.

Wealth Management provides a comprehensive array of financial services and solutions to individual investors and small to medium-sized businesses and institutions covering brokerage and investment advisory services, financial and wealth planning services, annuity and insurance products, credit and other lending products, banking and retirement plan services.

Investment Management provides a broad range of investment strategies and products that span geographies, asset classes, and public and private markets to a diverse group of clients across institutional and intermediary channels. Strategies and products include equity, fixed income, liquidity and alternative/other products. Institutional clients include defined benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, third-party fund sponsors and corporations. Individual clients are serviced through intermediaries, including affiliated and non-affiliated distributors.

The results of operations in the past have been, and in the future may continue to be, materially affected by competition; risk factors; and legislative, legal and regulatory developments; as well as other factors. These factors also may have an adverse impact on our ability to achieve our strategic objectives. Additionally, the discussion of our results of operations herein may contain forward-looking statements. These statements, which reflect management’s beliefs and expectations, are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of the risks and uncertainties that may affect our future results, see “Forward-Looking Statements,” “Business—Competition” and “Business—Supervision and Regulation,” “Risk Factors” in the 2017 Form 10-K and “Liquidity and Capital Resources—Regulatory Requirements” herein.

1 March 2018 Form 10-Q

Management’s Discussion and Analysis

Executive Summary

Overview of Financial Results

Consolidated Results

Net Revenues

($ in millions)

Net Income Applicable to Morgan Stanley

($ in millions)

Earnings per Common Share¹

1. For the calculation of basic and diluted EPS, see Note 15 to the financial statements.

• We reported net revenues of $11,077 million in the quarter ended March 31, 2018 (“current quarter,” or “1Q 2018”), compared with $9,745 million in the quarter ended March 31, 2017 (“prior year quarter,” or “1Q 2017”). For the current quarter, net income applicable to Morgan Stanley was $2,668 million, or $1.45 per diluted common share, compared with $1,930 million, or $1.00 per diluted common share, in the prior year quarter.

Non-interest Expenses

($ in millions)

• Compensation and benefits expenses of $4,914 million in the current quarter increased 10% from $4,466 million in the prior year quarter, primarily due to increases in discretionary incentive compensation across segments, the formulaic payout to Wealth Management representatives linked to higher revenues and salaries, partially offset by a decrease in the fair value of investments to which certain deferred compensation plans are referenced.

• Non-compensation expenses were $2,743 million in the current quarter compared with $2,471 million in the prior year quarter representing an 11% increase. This increase was primarily a result of higher volume-related expenses and the gross presentation of certain expenses due to the adoption of the accounting update Revenue from Contracts with Customers (see Notes 2 and 20 to the financial statements for further information). These results were partially offset in the current quarter by the reversal of a portion of previously recorded provisions related to U.K. VAT matters.

March 2018 Form 10-Q 2

Management’s Discussion and Analysis

Expense Efficiency Ratio¹

Return on Average Common Equity²

Return on Average Tangible Common Equity²

1. The expense efficiency ratio represents total non-interest expense as a percentage of net revenues.

2. Represents a non-GAAP measure. See “Selected Non-GAAP Financial Information” herein.

Business Segment Results

Net Revenues by Segment^{1, 2} 

($ in millions)

Net Income Applicable to Morgan Stanley by Segment^{1, 3}

($ in millions)

1. The percentages in the charts represent the contribution of each business segment to the total. Amounts do not necessarily total to 100% due to intersegment eliminations, where applicable.

2. The total amount of Net Revenues by Segment also includes intersegment eliminations of $(115) million and $(74) million in the current quarter and prior year quarter, respectively.

3. The total amount of Net Income Applicable to Morgan Stanley by Segment also includes intersegment eliminations of $2 million in the prior year quarter.

• Institutional Securities net revenues of $6,100 million in the current quarter increased 18% from the prior year quarter, primarily reflecting higher sales and trading and Investment banking revenues across all regions.

• Wealth Management net revenues of $4,374 million in the current quarter increased 8% from the prior year quarter, primarily reflecting growth in Asset management revenues.

• Investment Management net revenues of $718 million in the current quarter increased 18% from the prior year quarter, primarily reflecting higher revenues from Asset management.

3 March 2018 Form 10-Q

Management’s Discussion and Analysis

Net Revenues by Region¹

($ in millions)

1. For a discussion of how the geographic breakdown for net revenues is determined, see Note 19 to the financial statements.

Selected Financial Information and Other Statistical Data

	Three Months Ended March 31,
$ in millions	2018			2017
Income from continuing operations applicable to Morgan Stanley	$	2,670		$	1,952
Income (loss) from discontinued operations applicable to Morgan Stanley		(2	)		(22	)
Net income applicable to Morgan Stanley		2,668			1,930
Preferred stock dividends and other		93			90
Earnings applicable to Morgan Stanley common shareholders	$	2,575		$	1,840

in millions, except per share and employee data	At March 31, 2018		At December 31, 2017
GLR1	$	206,463	$	192,660
Loans2	$	109,135	$	104,126
Total assets	$	858,495	$	851,733
Deposits	$	160,424	$	159,436
Borrowings	$	194,964	$	192,582
Common shareholders’ equity	$	69,514	$	68,871
Common shares outstanding		1,774		1,788
Book value per common share3	$	39.19	$	38.52
Worldwide employees		57,810		57,633

in millions, except per share and employee data	At March 31, 2018			At December 31, 2017
Capital ratios4
Common Equity Tier 1 capital ratio		15.5	%		16.5	%
Tier 1 capital ratio		17.7	%		18.9	%
Total capital ratio		20.3	%		21.7	%
Tier 1 leverage ratio		8.2	%		8.3	%

1. For a discussion of the GLR, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Liquidity Risk Management Framework—Global Liquidity Reserve” in the 2017 Form 10-K.

2. Amounts include loans held for investment (net of allowance) and loans held for sale but exclude loans at fair value, which are included in Trading assets in the balance sheets (see Note 7 to the financial statements).

3. Book value per common share equals common shareholders’ equity divided by common shares outstanding.

4. Beginning in 2018, our capital ratios are based on the Standardized Approach fully phased-in rules. At December 31, 2017, our capital ratios were based on the Standardized Approach transitional rules. For a discussion of our regulatory capital ratios, see “Liquidity and Capital Resources—Regulatory Requirements” herein.

Selected Non-GAAP Financial Information

We prepare our financial statements using U.S. GAAP. From time to time, we may disclose certain “non-GAAP financial measures” in this document or in the course of our earnings releases, earnings and other conference calls, financial presentations, Definitive Proxy Statement and otherwise. A “non-GAAP financial measure” excludes, or includes, amounts from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. We consider the non-GAAP financial measures we disclose to be useful to us, investors and analysts by providing further transparency about, or an alternate means of assessing, our financial condition, operating results, prospective regulatory capital requirements or capital adequacy. These measures are not in accordance with, or a substitute for, U.S. GAAP and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever we refer to a non-GAAP financial measure, we will also generally define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the U.S. GAAP financial measure and the non-GAAP financial measure.

The principal non-GAAP financial measures presented in this document are set forth below.

March 2018 Form 10-Q 4

Management’s Discussion and Analysis

Reconciliations from U.S. GAAP to Non-GAAP Consolidated Financial Measures

	Three Months Ended March 31,
$ in millions, except per share data	2018		2017
Net income applicable to Morgan Stanley	$	2,668	$	1,930
Impact of adjustments		—		14
Adjusted net income applicable to Morgan Stanley—non-GAAP1	$	2,668		1,944
Earnings per diluted common share	$	1.45	$	1.00
Impact of adjustments		—		0.01
Adjusted earnings per diluted common share—non-GAAP1	$	1.45	$	1.01
Effective income tax rate		20.9%		29.0%
Impact of adjustments		—%		(0.5)%
Adjusted effective income tax rate —non-GAAP1		20.9%		28.5%

							Average Monthly Balance
	At March 31, 2018			At December 31, 2017			Three Months Ended March 31,
$ in millions							2018			2017
Tangible Equity
U.S. GAAP
Morgan Stanley shareholders’ equity	$	78,034		$	77,391		$	77,507		$	77,259
Less: Goodwill and net intangible assets		(9,129	)		(9,042	)		(9,043	)		(9,262	)
Morgan Stanley tangible shareholders’ equity—non-GAAP	$	68,905		$	68,349		$	68,464		$	67,997
U.S. GAAP
Common equity	$	69,514		$	68,871		$	68,987		$	68,989
Less: Goodwill and net intangible assets		(9,129	)		(9,042	)		(9,043	)		(9,262	)
Tangible common equity—non-GAAP	$	60,385		$	59,829		$	59,944		$	59,727

Consolidated Non-GAAP Financial Measures

	Three Months Ended March 31,
$ in billions	2018		2017
Average common equity
Unadjusted	$	69.0	$	69.0
Adjusted1		69.0		69.0
ROE2
Unadjusted		14.9%		10.7%
Adjusted1, 3		14.9%		10.7%
Average tangible common equity
Unadjusted	$	59.9	$	59.7
Adjusted1		59.9		59.7
ROTCE2
Unadjusted		17.2%		12.3%
Adjusted1, 3		17.2%		12.4%

	At March 31, 2018		At December 31, 2017
Tangible book value per common share4	$	34.04	$	33.46

Non-GAAP Financial Measures by Business Segment

	Three Months Ended March 31,
$ in billions	2018		2017
Pre-tax profit margin5
Institutional Securities		35%		34%
Wealth Management		27%		24%
Investment Management		21%		17%
Consolidated		31%		29%
Average common equity6
Institutional Securities	$	40.8	$	40.2
Wealth Management		16.8		17.2
Investment Management		2.6		2.4
Parent Company		8.8		9.2
Consolidated average common equity	$	69.0	$	69.0
Average tangible common equity6
Institutional Securities	$	40.1	$	39.6
Wealth Management		9.2		9.3
Investment Management		1.7		1.6
Parent Company		8.9		9.2
Consolidated average tangible common equity	$	59.9	$	59.7
ROE2, 7
Institutional Securities		15.2%		11.4%
Wealth Management		21.3%		14.6%
Investment Management		19.3%		11.1%
Consolidated		14.9%		10.7%
ROTCE2, 7
Institutional Securities		15.5%		11.5%
Wealth Management		38.9%		27.0%
Investment Management		30.3%		16.3%
Consolidated		17.2%		12.3%

1. Adjusted amounts exclude intermittent net discrete tax provisions (benefits). Income tax consequences associated with employee share-based awards are recognized in Provision for income taxes in the income statements but are excluded from the intermittent net discrete tax provisions (benefits) adjustment as we anticipate conversion activity each quarter. For further information on the net discrete tax provisions (benefits), see “Supplemental Financial Information and Disclosures—Income Tax Matters” herein.

2. ROE and ROTCE equal net income applicable to Morgan Stanley less preferred dividends as a percentage of average common equity and average tangible common equity, on a consolidated basis as indicated. When excluding intermittent net discrete tax provisions (benefits), both the numerator and denominator are adjusted.

3. The calculations used in determining the Firm’s “ROE and ROTCE Targets” referred to below are the Adjusted ROE and Adjusted ROTCE amounts shown in this table.

4. Tangible book value per common share equals tangible common equity divided by common shares outstanding.

5. Pre-tax profit margin represents income from continuing operations before income taxes as a percentage of net revenues.

6. Average common equity and average tangible common equity for each business segment are determined using our Required Capital framework (see “Liquidity and Capital Resources—Regulatory Requirements—Attribution of Average Common Equity According to the Required Capital Framework” herein).

7. The calculation of ROE and ROTCE by segment uses net income applicable to Morgan Stanley by segment less preferred dividends allocated to each segment as a percentage of average common equity and average tangible common equity, allocated to each segment.

5 March 2018 Form 10-Q

Management’s Discussion and Analysis

Return on Equity and Tangible Common Equity Targets

In January 2018, we established an ROE Target of 10% to 13% for the medium term, which is equivalent to an ROTCE Target of 11.5% to 14.5%.

Our ROE and ROTCE Targets are forward-looking statements that may be materially affected by many factors, including, among other things: macroeconomic and market conditions; legislative and regulatory developments; industry trading and investment banking volumes; equity market levels; interest rate environment; outsize legal expenses or penalties and the ability to maintain a reduced level of expenses; capital levels; and intermittent discrete tax items. For further information on our ROE and ROTCE Targets and related assumptions, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Summary—Return on Equity and Tangible Common Equity Targets” in the 2017 Form 10-K.

Business Segments

Substantially all of our operating revenues and operating expenses are directly attributable to the business segments. Certain revenues and expenses have been allocated to each business segment, generally in proportion to its respective net revenues, non-interest expenses or other relevant measures.

As a result of treating certain intersegment transactions as transactions with external parties, we include an Intersegment Eliminations category to reconcile the business segment results to our consolidated results.

Net Revenues, Compensation Expense and Income Taxes

For an overview of the components of our net revenues, compensation expense and income taxes, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Segments” in the 2017 Form 10-K.

March 2018 Form 10-Q 6

Management’s Discussion and Analysis

Institutional Securities

Income Statement Information

	Three Months Ended March 31,
$ in millions	2018		2017		% Change
Revenues
Investment banking	$	1,513	$	1,417		7%
Trading		3,643		3,012		21%
Investments		49		66		(26)%
Commissions and fees		744		620		20%
Asset management		110		91		21%
Other		136		173		(21)%
Total non-interest revenues		6,195		5,379		15%
Interest income		1,804		1,124		60%
Interest expense		1,899		1,351		41%
Net interest		(95)		(227)		58%
Net revenues		6,100		5,152		18%
Compensation and benefits		2,160		1,870		16%
Non-compensation expenses		1,828		1,552		18%
Total non-interest expenses		3,988		3,422		17%
Income from continuing operations before income taxes		2,112		1,730		22%
Provision for income taxes		449		459		(2)%
Income from continuing operations		1,663		1,271		31%
Income (loss) from discontinued operations, net of income taxes		(2)		(22)		91%
Net income		1,661		1,249		33%
Net income applicable to noncontrolling interests		34		35		(3)%
Net income applicable to Morgan Stanley	$	1,627	$	1,214		34%

Investment Banking

Investment Banking Revenues

	Three Months Ended March 31,
$ in millions	2018		2017		% Change
Advisory	$	574	$	496		16%
Underwriting:
Equity		421		390		8%
Fixed income		518		531		(2)%
Total underwriting		939		921		2%
Total investment banking	$	1,513	$	1,417		7%

Investment Banking Volumes

	Three Months Ended March 31,
$ in billions	2018		2017
Completed mergers and acquisitions1	$	145	$	163
Equity and equity-related offerings2, 3		21		10
Fixed income offerings2, 4		54		75

Source: Thomson Reuters, data as of April 2, 2018. Transaction volumes may not be indicative of net revenues in a given period. In addition, transaction volumes for prior periods may vary from amounts previously reported due to the subsequent withdrawal or change in the value of a transaction.

1. Amounts include transactions of $100 million or more. Completed mergers and acquisitions volumes are based on full credit to each of the advisors in a transaction.

2. Equity and equity-related offerings and fixed income offerings are based on full credit for single book managers and equal credit for joint book managers.

3. Amounts include Rule 144A issuances and registered public offerings of common stock and convertible securities and rights offerings.

4. Amounts include non-convertible preferred stock, mortgage-backed and asset-backed securities, and taxable municipal debt. Amounts include publicly registered and Rule 144A issuances. Amounts exclude leveraged loans and self-led issuances.

Investment banking revenues are composed of fees from advisory services and revenues from the underwriting of securities offerings and syndication of loans, net of syndication expenses.

Investment banking revenues of $1,513 million in the current quarter increased 7% from the prior year quarter. The adoption of the accounting update Revenue from Contracts with Customers had the effect of increasing the revenues reported in investment banking by approximately $60 million compared with the prior year quarter (see Notes 2 and 20 to the financial statements for further information). The drivers of the increase in our Investment banking revenues, other than the effect of the above accounting update, were:

• Advisory revenues increased in the current quarter primarily reflecting higher M&A fee realizations on larger transactions.

• Equity underwriting revenues increased in the current quarter primarily as a result of higher market volumes (see Investment Banking Volumes table), partially offset by the effect of lower fee realizations.

• Fixed income underwriting revenues decreased in the current quarter primarily due to lower market volumes, which resulted in lower bond fees, partially offset by higher loan fees.

7 March 2018 Form 10-Q

Management’s Discussion and Analysis

Sales and Trading Net Revenues

By Income Statement Line Item

	Three Months Ended March 31,
$ in millions	2018		2017		% Change
Trading	$	3,643	$	3,012		21%
Commissions and fees		744		620		20%
Asset management		110		91		21%
Net interest		(95)		(227)		58%
Total	$	4,402	$	3,496		26%

By Business

	Three Months Ended March 31,
$ in millions	2018		2017		% Change
Equity	$	2,558	$	2,016		27%
Fixed income		1,873		1,714		9%
Other		(29)		(234)		88%
Total	$	4,402	$	3,496		26%

Sales and Trading Revenues—Equity and Fixed Income

	Three Months Ended March 31, 2018
$ in millions	Trading		Fees1		Net Interest2			Total
Financing	$	1,234	$	107	$	(146	)	$	1,195
Execution services		791		664		(92	)		1,363
Total Equity	$	2,025	$	771	$	(238	)	$	2,558
Total Fixed income	$	1,715	$	83	$	75		$	1,873

	Three Months Ended March 31, 2017
$ in millions	Trading		Fees1		Net Interest2			Total
Financing	$	931	$	89	$	(188	)	$	832
Execution services		664		568		(48	)		1,184
Total Equity	$	1,595	$	657	$	(236	)	$	2,016
Total Fixed income	$	1,598	$	54	$	62		$	1,714

1. Includes Commissions and fees and Asset management revenues.

2. Funding costs are allocated to the businesses based on funding usage and are included in Net interest.

As discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Segments—Net Revenues by Segment” in the 2017 Form 10-K, we manage each of the sales and trading businesses based on its aggregate net revenues. We provide qualitative commentary in the discussion of results that follow on the key drivers of period over period variances, as the quantitative impact of the various market dynamics typically cannot be disaggregated.

For additional information on total Trading revenues, see the table “Trading Revenues by Product Type” in Note 4 to the financial statements.

Equity

Equity sales and trading net revenues of $2,558 million in the current quarter increased 27% from the prior year quarter, reflecting higher results in both our financing businesses and execution services.

• Financing revenues increased from the prior year quarter, primarily reflecting higher client activity across all products as reflected in Trading revenues.

• Execution services increased from the prior year quarter, primarily reflecting higher Trading revenues driven by higher client activity in derivatives products. In addition, Commissions and fees increased from higher client activity in cash equities products.

Fixed Income

Fixed income net revenues of $1,873 million in the current quarter were 9% higher than in the prior year quarter, driven by higher results in global macro products and commodities products and other, partially offset by lower results in credit products.

• Global macro products increased due to higher Trading revenues in foreign exchange driven by inventory management and client activity, partially offset by lower client activity in structured rates.

• Credit products Trading revenues decreased primarily due to the effect of the widening of corporate credit spreads on inventory prices.

• Commodities products and other increased primarily due to higher Trading revenues from hedging counterparty risk and increased Commodities structured transactions and customer flow in power and natural gas products.

Other

Other sales and trading net losses of $29 million in the current quarter decreased from the prior year quarter, primarily reflecting higher revenues on economic hedges related to our long-term debt and lower losses associated with corporate loan hedging activity.

March 2018 Form 10-Q 8

Management’s Discussion and Analysis

Investments, Other Revenues and Non-interest Expenses

Investments

• Net investment gains of $49 million in the current quarter decreased from the prior year quarter as a result of losses on investments to which certain deferred compensation plans are referenced in the current quarter compared with gains in the prior year quarter.

Other Revenues

• Other revenues of $136 million in the current quarter decreased from the prior year quarter, primarily reflecting lower gains associated with held-for-sale corporate loans.

Non-interest Expenses

Non-interest expenses of $3,988 million in the current quarter increased from the prior year quarter, primarily reflecting a 16% increase in Compensation and benefits expenses and an 18% increase in Non-compensation expenses in the current quarter.

• Compensation and benefits expenses increased in the current quarter, primarily due to increases in discretionary incentive compensation driven by higher revenues and salaries.

• Non-compensation expenses increased in the current quarter, primarily as a result of higher volume-related expenses and the gross presentation of certain expenses due to the adoption of the accounting update Revenue from Contracts with Customers (see Notes 2 and 20 to the financial statements for further information). These results were partially offset in the current quarter by the reversal of a portion of previously recorded provisions related to U.K. VAT matters.

9 March 2018 Form 10-Q

Management’s Discussion and Analysis

Wealth Management

Income Statement Information

	Three Months Ended March 31,
$ in millions	2018		2017		% Change
Revenues
Investment banking	$	140	$	145		(3)%
Trading		109		238		(54)%
Investments		—		1		N/M
Commissions and fees		498		440		13%
Asset management		2,495		2,184		14%
Other		63		56		13%
Total non-interest revenues		3,305		3,064		8%
Interest income		1,280		1,079		19%
Interest expense		211		85		148%
Net interest		1,069		994		8%
Net revenues		4,374		4,058		8%
Compensation and benefits		2,450		2,317		6%
Non-compensation expenses		764		768		(1)%
Total non-interest expenses		3,214		3,085		4%
Income from continuing operations before income taxes		1,160		973		19%
Provision for income taxes		246		326		(25)%
Net income applicable to Morgan Stanley	$	914	$	647		41%

Financial Information and Statistical Data

$ in billions	At March 31, 2018		At December 31, 2017
Client assets	$	2,371	$	2,373
Fee-based client assets1	$	1,058	$	1,045
Fee-based client assets as a percentage of total client assets		45%		44%
Client liabilities2	$	80	$	80
Investment securities portfolio	$	60.7	$	59.2
Loans and lending commitments	$	78.7	$	77.3
Wealth Management representatives		15,682		15,712

	Three Months Ended March 31,
	2018		2017
Per representative:
Annualized revenues ($ in thousands)3	$	1,115	$	1,029
Client assets ($ in millions)4	$	151	$	139
Fee-based asset flows ($ in billions)5	$	18.2	$	18.8

1. Fee-based client assets represent the amount of assets in client accounts where the basis of payment for services is a fee calculated on those assets.

2. Client liabilities include securities-based and tailored lending, residential real estate loans and margin lending.

3. Annualized revenues per representative equal Wealth Management’s annualized revenues divided by the average representative headcount.

4. Client assets per representative equal total period-end client assets divided by period-end representative headcount.

5. Fee-based asset flows include net new fee-based assets, net account transfers, dividends, interest and client fees and exclude institutional cash management-related activity.

Transactional Revenues

	Three Months Ended March 31,
$ in millions	2018		2017		% Change
Investment banking	$	140	$	145		(3)%
Trading		109		238		(54)%
Commissions and fees		498		440		13%
Total	$	747	$	823		(9)%
Transactional revenues as a % of Net revenues		17%		20%

Net Revenues

Transactional Revenues

Transactional revenues of $747 million in the current quarter decreased 9% from the prior year quarter primarily as a result of decreased Trading revenues, partially offset by increased Commissions and fees.

• Investment banking revenues were relatively unchanged in the current quarter compared with prior year quarter.

• Trading revenues decreased in the current quarter primarily as a result of losses related to investments associated with certain employee deferred compensation plans and lower client activity in fixed income products.

• Commissions and fees increased in the current quarter primarily as a result of higher client trading activity in equities.

March 2018 Form 10-Q 10

Management’s Discussion and Analysis

Asset Management

Asset management revenues of $2,495 million in the current quarter increased 14% from the prior year quarter primarily due to the effect of market appreciation and net positive flows on average fee-based client assets.

See “Fee-Based Client Assets Rollforwards” herein.

Net Interest

Net interest of $1,069 million in the current quarter increased 8% from the prior year quarter primarily as a result of higher interest rates and higher loan balances.

Non-interest Expenses

Non-interest expenses of $3,214 million in the current quarter increased 4% from the prior year quarter.

• Compensation and benefits expenses increased in the current quarter primarily due to the formulaic payout to Wealth Management representatives linked to higher revenues and increases in salaries, partially offset by decreases in the fair value of investments to which certain deferred compensation plans are referenced.

• Non-compensation expenses were relatively unchanged in the current quarter compared with prior year quarter.

Fee-Based Client Assets

For a description of fee-based client assets, including descriptions of the fee based client asset types and rollforward items in the following tables, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Segments—Wealth Management—Fee-Based Client Assets” in the 2017 Form 10-K.

Fee-Based Client Assets Rollforwards

$ in billions	At December 31, 2017		Inflows		Outflows			Market Impact			At March 31, 2018
Separately managed1	$	252	$	10	$	(6	)	$	4		$	260
Unified managed		250		14		(8	)		(2	)		254
Mutual fund advisory		21		—		(1	)		—			20
Advisor		149		9		(9	)		(2	)		147
Portfolio manager		353		21		(12	)		(6	)		356
Subtotal	$	1,025	$	54	$	(36	)	$	(6	)	$	1,037
Cash management		20		4		(3	)		—			21
Total fee-based client assets	$	1,045	$	58	$	(39	)	$	(6	)	$	1,058

$ in billions	At December 31, 2016		Inflows		Outflows		Market Impact		At March 31, 2017
Separately managed1	$	222	$	9	$	(5)	$	4	$	230
Unified managed		204		13		(9)		9		217
Mutual fund advisory		21		—		(1)		1		21
Advisor		125		10		(7)		5		133
Portfolio manager		285		20		(11)		11		305
Subtotal	$	857	$	52	$	(33)	$	30	$	906
Cash management		20		3		(2)		—		21
Total fee-based client assets	$	877	$	55	$	(35)	$	30	$	927

Average Fee Rates

	Three Months Ended March 31,
Fee rate in bps	2018		2017
Separately managed		16		16
Unified managed		98		100
Mutual fund advisory		119		120
Advisor		85		86
Portfolio manager		96		98
Subtotal		76		77
Cash management		6		6
Total fee-based client assets		75		75

1. Includes non-custody account values reflecting prior quarter-end balances due to a lag in the reporting of asset values by third-party custodians.

11 March 2018 Form 10-Q

Management’s Discussion and Analysis

Investment Management

Income Statement Information

	Three Months Ended March 31,
$ in millions	2018		2017			% Change
Revenues
Trading	$	5	$	(11	)		145%
Investments		77		98			(21)%
Asset management		626		517			21%
Other		10		4			150%
Total non-interest revenues		718		608			18%
Interest income		1		1			—%
Interest expense		1		—			N/M
Net interest		—		1			N/M
Net revenues		718		609			18%
Compensation and benefits		304		279			9%
Non-compensation expenses		266		227			17%
Total non-interest expenses		570		506			13%
Income from continuing operations before income taxes		148		103			44%
Provision for income taxes		19		30			(37)%
Net income		129		73			77%
Net income (loss) applicable to noncontrolling interests		2		6			(67)%
Net income applicable to Morgan Stanley	$	127	$	67			90%

Net Revenues

Investments

Investments gains of $77 million in the current quarter decreased 21% from the prior year quarter primarily as a result of lower carried interest in certain private equity funds.

Asset Management

Asset management revenues of $626 million in the current quarter increased 21% from the prior year quarter primarily as a result of higher average AUM across all asset classes. In addition, Asset management revenues increased as a result of the gross presentation of distribution fees due to the adoption of the accounting update Revenue from Contracts with Customers (see Notes 2 and 20 to the financial statements for further details).

In addition to the gross presentation described above, the timing of the recognition of certain performance fees not in the form of carried interest is generally expected to be deferred within a fiscal year until the fees are no longer probable of being reversed. Thus, the recognition of a greater portion of such revenues is expected to be recognized in the second half of each fiscal year based on current fee arrangements.

See “Assets Under Management or Supervision” herein.

Non-interest Expenses

Non-interest expenses of $570 million in the current quarter increased 13% from the prior year quarter primarily as a result of increases in both Compensation and benefits expenses and Non-compensation expenses.

• Compensation and benefits expenses increased in the current quarter primarily as a result of increases in discretionary incentive compensation driven mainly by higher revenues, increases in salaries, and deferred compensation associated with carried interest.

• Non-compensation expenses increased in the current quarter primarily as a result of the gross presentation of distribution fees due to adoption of the accounting update Revenue from Contracts with Customers along with higher fee sharing on increased AUM balances. See Asset Management above.

Assets Under Management or Supervision

For a description of the asset classes and rollforward items in the following tables, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Segments—Investment Management—Assets Under Management or Supervision” in the 2017 Form 10-K.

AUM Rollforwards

$ in billions	At December 31, 2017		Inflows		Outflows			Market Impact			Other1		At March 31, 2018
Equity	$	105	$	9	$	(7	)	$	1		$	1	$	109
Fixed income		73		7		(8	)		(1	)		1		72
Alternative/Other		128		4		(4	)		—			3		131
Long-term AUM subtotal		306		20		(19	)		—			5		312
Liquidity		176		325		(344	)		—			—		157
Total AUM	$	482	$	345	$	(363	)	$	—		$	5	$	469
Shares of minority stake assets		7												7
$ in billions	At December 31, 2016		Inflows		Outflows			Market Impact			Other1		At March 31, 2017
Equity	$	79	$	5	$	(5	)	$	8		$	—	$	87
Fixed income		60		5		(5	)		1			1		62
Alternative/Other		115		7		(4	)		1			—		119
Long-term AUM subtotal		254		17		(14	)		10			1		268
Liquidity		163		328		(338	)		—			—		153
Total AUM	$	417	$	345	$	(352	)	$	10		$	1	$	421
Shares of minority stake assets		8												7

1. Includes distributions and foreign currency impact for both periods and the impact of the Mesa West Capital, LLC acquisition in the current quarter.

March 2018 Form 10-Q 12

Management’s Discussion and Analysis

Average AUM

	Three Months Ended March 31,
$ in billions	2018		2017
Equity	$	109	$	83
Fixed income		73		62
Alternative/Other		129		117
Long-term AUM subtotal		311		262
Liquidity		163		157
Total AUM	$	474	$	419
Shares of minority stake assets		7		7

Average Fee Rate

	Three Months Ended March 31,
Fee rate in bps	2018		2017
Equity		76		74
Fixed income		35		33
Alternative/Other		68		71
Long-term AUM		63		63
Liquidity		18		18
Total AUM		47		46

13 March 2018 Form 10-Q

Management’s Discussion and Analysis

Supplemental Financial Information and Disclosures

Income Tax Matters

Effective Tax Rate from Continuing Operations

	Three Months Ended March 31,
	2018		2017
U.S. GAAP		20.9%		29.0%
Adjusted effective income tax rate—non-GAAP1		20.9%		28.5%

1. Adjusted amounts exclude an intermittent net discrete tax provision of $14 million in the prior year quarter. Income tax consequences associated with employee share-based awards are recognized in Provision for income taxes in the income statements but are excluded from the intermittent net discrete tax provisions (benefits) adjustment as we anticipate conversion activity each quarter. For further information on non-GAAP measures, see “Selected Non-GAAP Financial Information” herein.

The effective tax rates include recurring-type discrete tax benefits associated with employee share-based payments of $147 million and $112 million in the current quarter and prior year quarter, respectively.

The effective tax rate reflects our current assumptions, estimates and interpretations related to the U.S. Tax Cuts and Jobs Act (“Tax Act”) and other factors. The Tax Act, enacted on December 22, 2017, significantly revised U.S. corporate income tax law by, among other things, reducing the corporate income tax rate to 21%, and implementing a modified territorial tax system that includes a one-time transition tax on deemed repatriated earnings of non-U.S. subsidiaries; imposes a minimum tax on global intangible low-taxed income (“GILTI”) and an alternative base erosion and anti-abuse tax (“BEAT”) on U.S. corporations that make deductible payments to non-U.S. related persons in excess of specified amounts; and broadens the tax base by partially or wholly eliminating tax deductions for certain historically deductible expenses.

Our estimates may change as additional clarification and implementation guidance continue to be received from the U.S. Treasury Department and as the interpretation of the Tax Act evolves over time. Taking into account continuing developments related to provisions of the Tax Act such as the modified territorial tax system and GILTI, we expect our effective tax rate from continuing operations for 2018 to be approximately 22% to 25% (see “Forward-Looking Statements” in the 2017 Form 10-K).

U.S. Bank Subsidiaries

We provide loans to a variety of customers, from large corporate and institutional clients to high net worth individuals, primarily through our U.S. bank subsidiaries, Morgan Stanley Bank N.A. (“MSBNA”) and Morgan Stanley Private Bank, National Association (“MSPBNA”) (collectively, “U.S. Bank Subsidiaries”). The lending activities in the Institutional Securities business segment primarily include loans and lending commitments to corporate clients. The lending activities in the Wealth Management business segment primarily include: securities-based lending, which allows clients to borrow money against the value of qualifying securities; and residential real estate loans.

We expect our lending activities to continue to grow through further market penetration of the client base. For a further discussion of our credit risks, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Credit Risk.” For further discussion about loans and lending commitments, see Notes 7 and 11 to the financial statements.

U.S. Bank Subsidiaries’ Supplemental Financial Information¹

$ in billions	At     March 31,     2018		At   December 31,   2017
Assets	$	188.3	$	185.3
Investment securities portfolio:
Investment securities—AFS		43.1		42.0
Investment securities—HTM		18.0		17.5
Total investment securities	$	61.1	$	59.5
Deposits2	$	160.1	$	159.1
Wealth Management
Securities-based lending and other loans3	$	41.7	$	41.2
Residential real estate loans		26.6		26.7
Total	$	68.3	$	67.9
Institutional Securities
Corporate loans	$	27.4	$	24.2
Wholesale real estate loans		12.4		12.2
Total	$	39.8	$	36.4

1. Amounts exclude transactions with the Parent Company and between the bank subsidiaries.

2. For further information on deposits, see “Liquidity and Capital Resources—Funding Management—Unsecured Financing” herein.

3. Other loans primarily include tailored lending.

March 2018 Form 10-Q 14

Management’s Discussion and Analysis

Accounting Development Updates

The Financial Accounting Standards Board has issued certain accounting updates that apply to us. Accounting updates not listed below were assessed and determined to be either not applicable or are not expected to have a significant impact on our financial statements.

The following accounting updates are currently being evaluated to determine the potential impact of adoption:

• Leases. This accounting update requires lessees to recognize in the balance sheet all leases with terms exceeding one year, which results in the recognition of a right of use asset and corresponding lease liability, including for those leases that we currently classify as operating leases. The accounting for leases where we are the lessor is largely unchanged.

The right of use asset and lease liability will initially be measured using the present value of the remaining rental payments. This change to the accounting for leases where we are lessee requires modifications to our lease accounting systems and determining the present value of the remaining rental payments. Key aspects of the latter include concluding upon the discount rate and determining whether to include non-lease components in rental payments. This update is effective as of January 1, 2019 with early adoption permitted.

• Financial Instruments–Credit Losses. This accounting update impacts the impairment model for certain financial assets measured at amortized cost by requiring a CECL methodology to estimate expected credit losses over the entire life of the financial asset, recorded at inception or purchase. CECL will replace the loss model currently applicable to loans held for investment, HTM securities and other receivables carried at amortized cost.

The update also eliminates the concept of other-than-temporary impairment for AFS securities. Impairments on AFS securities will be required to be recognized in earnings through an allowance, when the fair value is less than amortized cost and a credit loss exists or the securities are expected to be sold before recovery of amortized cost.

Under the update, there may be an ability to determine there are no expected credit losses in certain circumstances, e.g., based on collateral arrangements for lending and financing transactions or based on the credit quality of the borrower or issuer.

Overall, the amendments in this update are expected to accelerate the recognition of credit losses for portfolios

where the CECL models will be applied. This update is effective as of January 1, 2020 with early adoption permitted as of January 1, 2019.

Critical Accounting Policies

Our financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions (see Note 1 to the financial statements). We believe that of our significant accounting policies (see Note 2 to the financial statements in the 2017 Form 10-K and Note 2 to the financial statements), the fair value, goodwill and intangible assets, legal and regulatory contingencies and income taxes policies involve a higher degree of judgment and complexity. For a further discussion about our critical accounting policies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in the 2017 Form 10-K.

Liquidity and Capital Resources

Senior management, with oversight by the Asset and Liability Management Committee and the Board of Directors (“Board”), establishes and maintains our liquidity and capital policies. Through various risk and control committees, senior management reviews business performance relative to these policies, monitors the availability of alternative sources of financing, and oversees the liquidity, interest rate and currency sensitivity of our asset and liability position. The Treasury department, Firm Risk Committee, Asset and Liability Management Committee, and other committees and control groups assist in evaluating, monitoring and controlling the impact that our business activities have on our balance sheet, liquidity and capital structure. Liquidity and capital matters are reported regularly to the Board and the Risk Committee of the Board.

Balance Sheet

We monitor and evaluate the composition and size of our balance sheet on a regular basis. Our balance sheet management process includes quarterly planning, business-specific thresholds, monitoring of business-specific usage versus key performance metrics and new business impact assessments.

We establish balance sheet thresholds at the consolidated and business segment levels. We monitor balance sheet utilization and review variances resulting from business activity or market fluctuations. On a regular basis, we review current performance versus established thresholds and assess the need to re-allocate our balance sheet based on business unit needs. We also monitor key metrics, including asset and liability size and capital usage.

15 March 2018 Form 10-Q

Management’s Discussion and Analysis

Total Assets by Business Segment

	At March 31, 2018
$ in millions	IS		WM		IM		Total
Assets
Cash and cash equivalents1	$	74,096	$	13,173	$	75	$	87,344
Trading assets at fair value		269,200		85		3,759		273,044
Investment securities		19,913		60,728		—		80,641
Securities purchased under agreements to resell		72,460		7,786		—		80,246
Securities borrowed		135,608		227		—		135,835
Customer and other receivables		48,257		17,973		605		66,835
Loans, net of allowance2		40,804		68,326		5		109,135
Other assets3		14,447		9,305		1,663		25,415
Total assets	$	674,785	$	177,603	$	6,107	$	858,495
	At December 31, 2017
$ in millions	IS		WM		IM		Total
Assets
Cash and cash equivalents1	$	63,597	$	16,733	$	65	$	80,395
Trading assets at fair value		295,678		59		2,545		298,282
Investment securities		19,556		59,246		—		78,802
Securities purchased under agreements to resell		74,732		9,526		—		84,258
Securities borrowed		123,776		234		—		124,010
Customer and other receivables		36,803		18,763		621		56,187
Loans, net of allowance2		36,269		67,852		5		104,126
Other assets3		14,563		9,596		1,514		25,673
Total assets	$	664,974	$	182,009	$	4,750	$	851,733

IS—Institutional Securities

WM—Wealth Management

IM—Investment Management

1. Cash and cash equivalents includes Cash and due from banks, Interest bearing deposits with banks and Restricted cash.

2. Amounts include loans held for investment (net of allowance) and loans held for sale but exclude loans at fair value, which are included in Trading assets in the balance sheets (see Note 7 to the financial statements).

3. Other assets primarily includes Goodwill, Intangible assets, premises, equipment, software, other investments, and deferred tax assets.

A substantial portion of total assets consists of liquid marketable securities and short-term receivables arising principally from sales and trading activities in the Institutional Securities business segment. Total assets increased to $858.5 billion at March 31, 2018 from $851.7 billion at December 31, 2017, primarily driven by an increase in Customer and other receivables and growth within the Institutional Securities loan portfolios. Trading Assets within the Institutional Securities business segment declined as we sold inventory in Equities to support increased demand and changes in client positioning. This was offset by increases in Securities borrowed and GLR cash deposits. For further information regarding our GLR, see “Global Liquidity Reserve” herein.

Securities Repurchase Agreements and Securities Lending

Securities borrowed or securities purchased under agreements to resell and securities loaned or securities sold under agreements to repurchase are treated as collateralized financings (see Note 2 to the financial statements in the 2017 Form 10-K and Note 6 to the financial statements).

Collateralized Financing Transactions

$ in millions	At March 31, 2018		At December 31, 2017
Securities purchased under agreements to resell and Securities borrowed	$	216,081	$	208,268
Securities sold under agreements to repurchase and Securities loaned	$	65,131	$	70,016
Securities received as collateral1	$	8,693	$	13,749
	Average Daily Balance Three Months Ended
$ in millions	March 31,          2018		December 31, 2017
Securities purchased under agreements to resell and Securities borrowed	$	211,753	$	214,343
Securities sold under agreements to repurchase and Securities loaned	$	65,684	$	66,879

1. Included in Trading assets in the balance sheets.

Customer Securities Financing

The customer receivable portion of securities financing transactions primarily includes customer margin loans, collateralized by customer-owned securities, which are segregated in accordance with regulatory requirements. The customer payable portion of securities financing transactions primarily includes payables to our prime brokerage customers. Our risk exposure on these transactions is mitigated by collateral maintenance policies that limit our credit exposure to customers and liquidity reserves held against this risk exposure.

Liquidity Risk Management Framework

The primary goal of our Liquidity Risk Management Framework is to ensure that we have access to adequate funding across a wide range of market conditions and time horizons. The framework is designed to enable us to fulfill our financial obligations and support the execution of our business strategies.

The core components of our Liquidity Risk Management Framework are the Required Liquidity Framework, Liquidity Stress Tests and the GLR, which support our target liquidity profile. For further discussion about the Firm’s Required Liquidity Framework and Liquidity Stress Tests, see “Management’s Discussion and Analysis of Financial

March 2018 Form 10-Q 16

Management’s Discussion and Analysis

Condition and Results of Operations—Liquidity and Capital Resources—Liquidity Risk Management Framework” in the 2017 Form 10-K.

At March 31, 2018 and December 31, 2017, we maintained sufficient liquidity to meet current and contingent funding obligations as modeled in our Liquidity Stress Tests.

Global Liquidity Reserve

We maintain sufficient global liquidity reserves pursuant to our Required Liquidity Framework. For further discussion of our GLR, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Liquidity Risk Management Framework—Global Liquidity Reserve” in the 2017 Form 10-K.

GLR by Type of Investment

$ in millions	At March 31, 2018		At December 31, 2017
Cash deposits with banks1	$	9,930	$	7,167
Cash deposits with central banks1		37,243		33,791
Unencumbered highly liquid securities:
U.S. government obligations		84,155		73,422
U.S. agency and agency mortgage-backed securities		51,805		55,750
Non-U.S. sovereign obligations2		20,334		19,424
Other investment grade securities		2,996		3,106
Total	$	206,463	$	192,660

1. Primarily included in Cash and due from banks and Interest bearing deposits with banks in the balance sheets.

2. Non-U.S. sovereign obligations are primarily composed of unencumbered German, French, Dutch, U.K. and Japanese government obligations.

GLR Managed by Bank and Non-Bank Legal Entities

	At March 31, 2018		At December 31, 2017		Average Daily      Balance      Three Months Ended
$ in millions					March 31, 2018
Bank legal entities
Domestic	$	68,826	$	70,364	$	69,955
Foreign		4,602		4,756		4,263
Total Bank legal entities		73,428		75,120		74,218
Non-Bank legal entities
Domestic:
Parent Company		48,998		41,642		44,184
Non-Parent Company		32,415		35,264		32,356
Total Domestic		81,413		76,906		76,540
Foreign		51,622		40,634		44,216
Total Non-Bank legal entities		133,035		117,540		120,756
Total	$	206,463	$	192,660	$	194,974

Regulatory Liquidity Framework

Liquidity Coverage Ratio

We and our U.S. Bank Subsidiaries are subject to the LCR requirements including a requirement to calculate each entity’s LCR on each business day. The requirements are designed to ensure that banking organizations have sufficient HQLA to cover net cash outflows arising from significant stress over 30 calendar days, thus promoting the short-term resilience of the liquidity risk profile of banking organizations. We and our U.S. Bank Subsidiaries are compliant with the minimum required LCR of 100%.

HQLA by Type of Asset and LCR

	Average Daily Balance Three Months Ended
$ in millions	March 31, 2018		December 31, 2017
HQLA
Cash deposits with central banks	$	33,350	$	33,450
Securities1		125,015		125,269
Total	$	158,365	$	158,719
LCR		121%		128%

1. Primarily includes U.S. Treasuries; U.S. agency mortgage-backed securities; sovereign bonds; investment grade corporate bonds; and publicly traded common equities.

The decrease in the LCR in the current quarter is due to an increase in net outflows (the denominator of the ratio) driven by the impact of an increase in lending commitments, primarily within the Institutional Securities business segment.

The regulatory definition of HQLA is substantially the same as our GLR. GLR includes cash placed at institutions other than central banks that is considered an inflow for LCR purposes. HQLA includes a portion of cash placed at central banks, certain unencumbered investment grade corporate bonds and publicly traded common equities, which do not meet the definition of our GLR.

Net Stable Funding Ratio

The objective of the NSFR is to reduce funding risk over a one-year horizon by requiring banking organizations to fund their activities with sufficiently stable sources of funding in order to mitigate the risk of future funding stress.

The Basel Committee on Banking Supervision (“Basel Committee”) has previously finalized the NSFR framework. In May 2016, the U.S. banking agencies issued a proposal to implement the NSFR in the U.S., which would apply to us and our U.S. Bank Subsidiaries. Our preliminary estimates, based on the current proposal, indicate that actions will be necessary to meet the requirement, which we would expect to

17 March 2018 Form 10-Q

Management’s Discussion and Analysis

accomplish by the effective date of any final rule. Our preliminary estimates are subject to risks and uncertainties that may cause actual results based on the final rule to differ materially from estimates. For an additional discussion of the NSFR, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Liquidity Framework—Net Stable Funding Ratio” in the 2017 Form 10-K.

Funding Management

We manage our funding in a manner that reduces the risk of disruption to our operations. We pursue a strategy of diversification of secured and unsecured funding sources (by product, investor and region) and attempt to ensure that the tenor of our liabilities equals or exceeds the expected holding period of the assets being financed.

We fund our balance sheet on a global basis through diverse sources. These sources may include our equity capital, borrowings, Securities sold under agreements to repurchase, securities lending, deposits, letters of credit and lines of credit. We have active financing programs for both standard and structured products targeting global investors and currencies.

Secured Financing

For a discussion of our secured financing activities, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Funding Management—Secured Financing” in the 2017 Form 10-K.

At March 31, 2018 and December 31, 2017, the weighted average maturity of our secured financing of less liquid assets was greater than 120 days.

Unsecured Financing

For a discussion of our unsecured financing activities, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Funding Management—Unsecured Financing” in the 2017 Form 10-K and see Note 4 to the financial statements.

Deposits

$ in millions	At March 31, 2018		At December 31, 2017
Savings and demand deposits:
Brokerage sweep deposits1	$	129,177	$	135,946
Savings and other		9,181		8,541
Total Savings and demand deposits		138,358		144,487
Time deposits2		22,066		14,949
Total	$	160,424	$	159,436

1. Represents balances swept from client brokerage accounts.

2. Certain time deposit accounts are carried at fair value under the fair value option (see Note 3 to the financial statements).

Deposits are primarily sourced from our Wealth Management clients and are considered to have stable, low-cost funding characteristics. Total deposits at March 31, 2018 were up slightly compared with December 31, 2017, primarily driven by measures to increase Time deposits and Savings and other deposits, partially offset by a reduction in Brokerage sweep deposits due to client deployment of cash into investments.

Borrowings

We believe that accessing debt investors through multiple distribution channels helps provide consistent access to the unsecured markets. In addition, the issuance of borrowings with original maturities greater than one year allows us to reduce reliance on short-term credit sensitive instruments. Borrowings with original maturities greater than one year are generally managed to achieve staggered maturities, thereby mitigating refinancing risk, and to maximize investor diversification through sales to global institutional and retail clients across regions, currencies and product types.

The availability and cost of financing to us can vary depending on market conditions, the volume of certain trading and lending activities, our credit ratings and the overall availability of credit. We also engage in, and may continue to engage in, repurchases of our borrowings in the ordinary course of business.

March 2018 Form 10-Q 18

Management’s Discussion and Analysis

Borrowings by Remaining Maturity at March 31, 2018¹

$ in millions	Parent Company		Subsidiaries		Total
Original maturities of one year or less	$	—	$	1,256	$	1,256
Original maturities greater than one year
2018	$	12,783	$	3,318	$	16,101
2019		21,765		3,769		25,534
2020		18,775		2,284		21,059
2021		20,163		2,650		22,813
2022		15,261		1,985		17,246
Thereafter		78,873		12,082		90,955
Total	$	167,620	$	26,088	$	193,708
Total Borrowings	$	167,620	$	27,344	$	194,964
Maturities over next 12 months2					$	23,029

1. Original maturity in the table is generally based on contractual final maturity. For Borrowings with put options, remaining maturity represents the earliest put date.

2. Includes only borrowings with original maturities greater than one year.

Borrowings increased to $194,964 million as of March 31, 2018 compared with $192,582 million at December 31, 2017. This increase is a result of issuances, partially offset primarily by maturities and retirements as presented in the following table.

$ in millions	Three Months Ended March 31, 2018
Issued	$	15,370
Matured or retired		11,377

For further information on Borrowings, see Note 10 to the financial statements.

Credit Ratings

We rely on external sources to finance a significant portion of our daily operations. The cost and availability of financing generally are impacted by our credit ratings, among other things. In addition, our credit ratings can have an impact on certain trading revenues, particularly in those businesses where longer-term counterparty performance is a key consideration, such as OTC derivative transactions, including credit derivatives and interest rate swaps. When determining credit ratings, rating agencies consider company-specific factors, other industry factors such as regulatory or legislative changes, and the macroeconomic environment, among other things.

Our credit ratings do not include any uplift from perceived government support from any rating agency given the significant progress of U.S. financial reform legislation and regulations. Some rating agencies have stated that they

currently incorporate various degrees of credit rating uplift from non-governmental third-party sources of potential support.

Parent Company and MSBNA Senior Unsecured Ratings at April 30, 2018
	Parent Company
	Short-Term Debt	Long-Term Debt	Rating Outlook
DBRS, Inc.	R-1 (middle)	A (high)	Stable
Fitch Ratings, Inc.	F1	A	Stable
Moody’s Investors Service, Inc.	P-2	A3	Stable
Rating and Investment Information, Inc.	a-1	A-	Stable
S&P Global Ratings	A-2	BBB+	Stable

	MSBNA
	Short-Term Debt	Long-Term Debt	Rating Outlook
Fitch Ratings, Inc.	F1	A+		Stable
Moody’s Investors Service, Inc.	P-1	A1		Stable
S&P Global Ratings	A-1	A+		Stable

In connection with certain OTC trading agreements and certain other agreements where we are a liquidity provider to certain financing vehicles associated with the Institutional Securities business segment, we may be required to provide additional collateral, immediately settle any outstanding liability balances with certain counterparties or pledge additional collateral to certain clearing organizations in the event of a future credit rating downgrade irrespective of whether we are in a net asset or net liability position.

The additional collateral or termination payments that may be called in the event of a future credit rating downgrade vary by contract and can be based on ratings by either or both of Moody’s Investors Service, Inc. (“Moody’s”) and S&P Global Ratings. The following table shows the future potential collateral amounts and termination payments that could be called or required by counterparties and clearing organizations in the event of one-notch or two-notch downgrade scenarios, from the lowest of Moody’s ratings or S&P Global Ratings, based on the relevant contractual downgrade triggers.

Incremental Collateral or Terminating Payments upon

Potential Future Rating Downgrade

$ in millions	At March 31, 2018		At December 31, 2017
One-notch downgrade	$	806	$	822
Two-notch downgrade		611		596

19 March 2018 Form 10-Q

Management’s Discussion and Analysis

While certain aspects of a credit rating downgrade are quantifiable pursuant to contractual provisions, the impact it would have on our business and results of operations in future periods is inherently uncertain and would depend on a number of interrelated factors, including, among others, the magnitude of the downgrade, the rating relative to peers, the rating assigned by the relevant agency pre-downgrade, individual client behavior and future mitigating actions we might take. The liquidity impact of additional collateral requirements is included in our Liquidity Stress Tests.

Capital Management

We view capital as an important source of financial strength and actively manage our consolidated capital position based upon, among other things, business opportunities, risks, capital availability and rates of return together with internal capital policies, regulatory requirements and rating agency guidelines and, therefore, in the future may expand or contract our capital base to address the changing needs of our businesses. We attempt to maintain total capital, on a consolidated basis, at least equal to the sum of our operating subsidiaries’ required equity.

Common Stock

	Three Months Ended March 31,
$ in millions		2018		2017
Repurchases of common stock under our share repurchase program	$	1,250	$	750

From time to time we repurchase our outstanding common stock, including as part of our share repurchase program. As previously announced, on April 18, 2018, we entered into a sales plan with Mitsubishi UFJ Financial Group, Inc. (“MUFG”) whereby MUFG will sell shares of the Firm’s common stock to us, as part of our share repurchase program. The sales plan is only intended to maintain MUFG’s ownership percentage below 24.9% in order to comply with MUFG’s passivity commitments to the Federal Reserve and will have no impact on the strategic alliance between MUFG and us, including the joint venture in Japan. For a description of our share repurchase program, see “Unregistered Sales of Equity Securities and Use of Proceeds.”

For a description of our capital plan, see “Liquidity and Capital Resources—Regulatory Requirements—Capital Plans and Stress Tests.”

Common Stock Dividend Announcement

Announcement date	April 18, 2018
Amount per share	$0.25
Date to be paid	May 15, 2018
Shareholders of record as of	April 30, 2018

Preferred Stock

Preferred Stock Dividend Announcement

Announcement date	March 15, 2018
Date paid	April 16, 2018
Shareholders of record as of	March 29, 2018

For additional information on common and preferred stock, see Note 14 to the financial statements.

Regulatory Requirements

Regulatory Capital Framework

We are a financial holding company (“FHC”) under the Bank Holding Company Act of 1956, as amended (“BHC Act”), and are subject to the regulation and oversight of the Board of Governors of the Federal Reserve System (“Federal Reserve”). The Federal Reserve establishes capital requirements for us, including well-capitalized standards, and evaluates our compliance with such capital requirements. The OCC establishes similar capital requirements and standards for our U.S. Bank Subsidiaries. The regulatory capital requirements are largely based on the Basel III capital standards established by the Basel Committee and also implement certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”).

Regulatory Capital Requirements

We are required to maintain minimum risk-based and leverage capital ratios under the regulatory capital requirements. For more information on our regulatory capital requirements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—Regulatory Capital Requirements” in the 2017 Form 10-K.

Regulatory Capital.    Minimum risk-based capital ratio requirements apply to Common Equity Tier 1 capital, Tier 1 capital and Total capital (which includes Tier 2 capital). Certain adjustments to and deductions from capital are required for purposes of determining these ratios, such as goodwill, intangible assets, certain deferred tax assets, other amounts in AOCI and investments in the capital instruments of unconsolidated financial institutions.

March 2018 Form 10-Q 20

Management’s Discussion and Analysis

In addition to the minimum risk-based capital ratio requirements, by 2019 we will be subject to the following buffers:

• A greater than 2.5% Common Equity Tier 1 capital conservation buffer;

• The Common Equity Tier 1 G-SIB capital surcharge, currently at 3%; and

• Up to a 2.5% Common Equity Tier 1 CCyB, currently set by U.S. banking agencies at zero.

In 2017 and 2018, each of the buffers is 50% and 75%, respectively, of the 2019 requirement noted above. Failure to maintain the buffers would result in restrictions on our ability to make capital distributions, including the payment of dividends and the repurchase of stock, and to pay discretionary bonuses to executive officers. For a further discussion of the G-SIB capital surcharge, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—G-SIB Capital Surcharge” in the 2017 Form 10-K.

Our risk-based capital ratios for purposes of determining regulatory compliance are the lower of the capital ratios computed under (i) the standardized approaches for calculating credit risk and market risk RWA (“Standardized Approach”) and (ii) the applicable advanced approaches for calculating credit risk, market risk and operational risk RWA (“Advanced Approach”). At March 31, 2018 and December 31, 2017, our ratios are based on the Standardized Approach rules.

Effective January 1, 2019, Common Equity Tier 1 capital, Tier 1 capital and Total capital requirements, inclusive of buffers, will increase to 10.0%, 11.5%, and 13.5%, respectively.

See “Total Loss-Absorbing Capacity, Long-Term Debt and Clean Holding Company Requirements” herein for additional capital requirements effective January 1, 2019.

Regulatory Capital Ratios

	At March 31, 2018
			Fully Phased-In
$ in millions	Required Ratio		Standardized		Advanced
Risk-based capital
Common Equity Tier 1 capital			$	60,568	$	60,568
Tier 1 capital				69,213		69,213
Total capital				79,363		79,138
Total RWA				390,390		378,442
Common Equity Tier 1 capital ratio		8.6%		15.5%		16.0%
Tier 1 capital ratio		10.1%		17.7%		18.3%
Total capital ratio		12.1%		20.3%		20.9%
Leverage-based capital
Adjusted average assets1			$	846,868		N/A
Tier 1 leverage ratio		4.0%		8.2%		N/A

	At December 31, 2017
			Transitional2				Fully Phased-In
$ in millions	Required Ratio		Standardized		Advanced		Standardized		Advanced
Risk-based capital
Common Equity
Tier 1 capital			$	61,134	$	61,134	$	60,564	$	60,564
Tier 1 capital				69,938		69,938		69,120		69,120
Total capital				80,275		80,046		79,470		79,240
Total RWA				369,578		350,212		377,241		358,324
Common Equity Tier 1 capital ratio		7.3%		16.5%		17.5%		16.1%		16.9%
Tier 1 capital ratio		8.8%		18.9%		20.0%		18.3%		19.3%
Total capital ratio		10.8%		21.7%		22.9%		21.1%		22.1%
Leverage-based capital
Adjusted average assets1			$	842,270		N/A	$	841,756		N/A
Tier 1 leverage ratio		4.0%		8.3%		N/A		8.2%		N/A

1. Adjusted average assets represent the denominator of the Tier 1 leverage ratio and are composed of the average daily balance of consolidated on-balance sheet assets under U.S. GAAP during the current quarter and the quarter ended December 31, 2017 adjusted for disallowed goodwill, intangible assets, certain deferred tax assets, certain investments in the capital instruments of unconsolidated financial institutions and other adjustments.

2. Regulatory compliance was determined based on capital ratios calculated under transitional rules until December 31, 2017.

At December 31, 2017, the pro forma fully phased-in estimated amounts utilize fully phased-in Tier 1 capital, including the fully phased-in Tier 1 capital deductions that applied beginning January 1, 2018. These pro forma fully phased-in estimates were non-GAAP financial measures because the related capital rules were not yet effective at December 31, 2017. These estimates were based on our understanding of the capital rules and other factors at the time.

21 March 2018 Form 10-Q

Management’s Discussion and Analysis

Well-Capitalized Regulatory Capital Ratio Requirements for U.S. Bank Subsidiaries

	At March 31, 2018
Common Equity Tier 1 risk-based capital ratio		6.5%
Tier 1 risk-based capital ratio		8.0%
Total risk-based capital ratio		10.0%
Tier 1 leverage ratio		5.0%
SLR		6.0%

For us to remain an FHC, our U.S. Bank Subsidiaries must qualify as well-capitalized by maintaining the ratio requirements set forth in the previous table. The Federal Reserve has not yet revised the well-capitalized standard for FHCs to reflect the higher capital standards required of us under the capital rules. Assuming that the Federal Reserve would apply the same or very similar well-capitalized standards to FHCs, each of our risk-based capital ratios, Tier 1 leverage ratio and SLR at March 31, 2018 would have exceeded the revised well-capitalized standard. The Federal Reserve may require an FHC to maintain risk- and leverage-based capital ratios substantially in excess of mandated well-capitalized levels, depending upon general economic conditions and the FHC’s particular condition, risk profile and growth plans.

Regulatory compliance was determined based on capital ratios including regulatory capital and RWA calculated under the transitional rules until December 31, 2017. The regulatory capital analyses in the following tables are presented using pro forma fully phased-in estimates as of December 31, 2017, which are equivalent to amounts calculated as of March 31, 2018.

Fully Phased-In Regulatory Capital

$ in millions	At March 31, 2018			At December 31, 20171
Common Equity Tier 1 capital
Common stock and surplus	$	12,911		$	14,354
Retained earnings		60,009			57,577
AOCI		(3,406	)		(3,060	)
Regulatory adjustments and deductions:
Net goodwill		(6,716	)		(6,599	)
Net intangible assets (other than goodwill and mortgage servicing assets)		(2,424	)		(2,446	)
Other adjustments and deductions2		194			738
Total Common Equity Tier 1 capital	$	60,568		$	60,564
Additional Tier 1 capital
Preferred stock	$	8,520		$	8,520
Noncontrolling interests		482			415
Other adjustments and deductions		(23	)		(23	)
Additional Tier 1 capital	$	8,979		$	8,912
Deduction for investments in covered funds		(334	)		(356	)
Total Tier 1 capital	$	69,213		$	69,120
Standardized Tier 2 capital
Subordinated debt	$	9,612		$	9,839
Noncontrolling interests		113			98
Eligible allowance for credit losses		448			423
Other adjustments and deductions		(23	)		(10	)
Total Standardized Tier 2 capital	$	10,150		$	10,350
Total Standardized capital	$	79,363		$	79,470
Advanced Tier 2 capital
Subordinated debt	$	9,612		$	9,839
Noncontrolling interests		113			98
Eligible credit reserves		223			193
Other adjustments and deductions		(23	)		(10	)
Total Advanced Tier 2 capital	$	9,925		$	10,120
Total Advanced capital	$	79,138		$	79,240

March 2018 Form 10-Q 22

Management’s Discussion and Analysis

Fully Phased-In Regulatory Capital Rollforward

$ in millions	Three Months Ended March 31, 2018
Common Equity Tier 1 capital
Common Equity Tier 1 capital at December 31, 20171	$	60,564
Change related to the following items:
Value of shareholders’ common equity		643
Net goodwill		(117	)
Net intangible assets (other than goodwill and mortgage servicing assets)		22
Other adjustments and deductions2		(544	)
Common Equity Tier 1 capital at March 31, 2018	$	60,568
Additional Tier 1 capital
Additional Tier 1 capital at December 31, 20171	$	8,912
Change related to the following items:
Noncontrolling interests		67
Other adjustments and deductions		—
Additional Tier 1 capital at March 31, 2018		8,979
Deduction for investments in covered funds at December 31, 2017		(356	)
Change in deduction for investments in covered funds		22
Deduction for investments in covered funds at March 31, 2018		(334	)
Tier 1 capital at March 31, 2018	$	69,213
Standardized Tier 2 capital
Tier 2 capital at December 31, 20171	$	10,350
Change related to the following items:
Eligible allowance for credit losses		25
Other changes, adjustments and deductions3		(225	)
Standardized Tier 2 capital at March 31, 2018	$	10,150
Total Standardized capital at March 31, 2018	$	79,363
Advanced Tier 2 capital
Tier 2 capital at December 31, 20171	$	10,120
Change related to the following items:
Eligible credit reserves		30
Other changes, adjustments and deductions3		(225	)
Advanced Tier 2 capital at March 31, 2018	$	9,925
Total Advanced capital at March 31, 2018	$	79,138

1. The pro forma fully phased-in estimates as of December 31, 2017 are non-GAAP financial measures. See “Selected Non-GAAP Financial Information” herein.

2. Other adjustments and deductions used in the calculation of Common Equity Tier 1 capital include credit spread premium over risk-free rate for derivative liabilities, net deferred tax assets, net after-tax DVA and adjustments related to AOCI.

3. Other changes, adjustments and deductions used in the calculations of Standardized and Advanced Tier 2 capital include changes in subordinated debt and noncontrolling interests.

Fully Phased-In RWA Rollforward

	Three Months Ended March 31, 20181
$ in millions	Standardized			Advanced
Credit risk RWA
Balance at December 31, 20172	$	301,946		$	170,754
Change related to the following items:
Derivatives		(229	)		3,568
Securities financing transactions		177			2,242
Securitizations		(357	)		(1,277	)
Investment securities		(270	)		320
Commitments, guarantees and loans		12,934			15,090
Cash		784			294
Equity investments		2,726			2,887
Other credit risk3		634			236
Total change in credit risk RWA	$	16,399		$	23,360
Balance at March 31, 2018	$	318,345		$	194,114
Market risk RWA
Balance at December 31, 20172	$	75,295		$	74,907
Change related to the following items:
Regulatory VaR		1,187			1,187
Regulatory stressed VaR		235			235
Incremental risk charge		2,968			2,968
Comprehensive risk measure		(2,135	)		(1,947	)
Specific risk:
Non-securitizations		(2,590	)		(2,590	)
Securitizations		(2,915	)		(2,917	)
Total change in market risk RWA	$	(3,250	)	$	(3,064	)
Balance at March 31, 2018	$	72,045		$	71,843
Operational risk RWA
Balance at December 31, 20172	$	N/A		$	112,663
Change in operational risk RWA		N/A			(178	)
Balance at March 31, 2018	$	N/A		$	112,485
Total RWA	$	390,390		$	378,442

Regulatory VaR—VaR for regulatory capital requirements

1. The RWA for each category in the table reflects both on- and off-balance sheet exposures, where appropriate.

2. The pro forma fully phased-in estimates as of December 31, 2017 are non-GAAP financial measures. See “Selected Non-GAAP Financial Information” herein.

3. Amount reflects assets not in a defined category, non-material portfolios of exposures and unsettled transactions, as applicable.

Credit risk RWA increased in the current quarter under the Standardized and Advanced Approaches primarily due to increased exposures in corporate lending within the Institutional Securities business segment. Credit risk RWA also increased under the Advanced Approach due to increased exposures in derivatives.

Market risk RWA decreased in the current quarter under the Standardized and Advanced Approaches primarily due to a decrease in standardized specific risk charges.

23 March 2018 Form 10-Q

Management’s Discussion and Analysis

The decrease in operational risk RWA under the Advanced Approach reflects a reduction in the internal loss frequency related to litigation utilized in the operational risk capital model.

Supplementary Leverage Ratio

Supplementary Leverage Exposure and Ratio

	At March 31, 2018		At December 31, 2017
$ in millions	Fully Phased-in		Transitional Basis1		Fully Phased-in2
Average total assets3	$	856,738	$	851,510	$	851,510
Adjustments4, 5		234,780		231,173		230,660
Supplementary leverage exposure	$	1,091,518	$	1,082,683	$	1,082,170
SLR		6.3%		6.5%		6.4%

1. Transitional provisions applied until December 31, 2017.

2. Estimated amounts utilize fully phased-in Tier 1 capital, including the fully phased-in Tier 1 capital deductions that apply beginning January 1, 2018.

3. Computed as the average daily balance of consolidated total assets under U.S. GAAP during the current quarter and the quarter ended December 31, 2017.

4. Computed as the average of the month-end balances over the current quarter and the quarter ended December 31, 2017.

5. Adjustments are to: (i) incorporate derivative exposures, including adding the related potential future exposure (including for derivatives cleared for clients), grossing up cash collateral netting where qualifying criteria are not met and adding the effective notional principal amount of sold credit protection offset by qualifying purchased credit protection; (ii) reflect the counterparty credit risk for repo-style transactions; (iii) add the credit equivalent amount for off-balance sheet exposures; and (iv) apply other adjustments to Tier 1 capital, including disallowed goodwill, intangible assets, certain deferred tax assets and certain investments in the capital instruments of unconsolidated financial institutions.

The SLR became effective as a capital standard on January 1, 2018. We are required to maintain a Tier 1 supplementary leverage ratio of 3% as well as an enhanced SLR capital buffer of at least 2% (for a total of at least 5%) in order to avoid limitations on capital distributions, including dividends and stock repurchases, and discretionary bonus payments to executive officers. In addition, our U.S. Bank Subsidiaries must maintain an SLR of 6% to be considered well-capitalized.

U.S. Bank Subsidiaries’ Fully Phased-In Supplementary Leverage Ratios

	At March 31, 2018		At December 31, 20171
MSBNA		9.0%		9.1%
MSPBNA		9.3%		9.3%

1. Estimated amounts utilize fully phased-in Tier 1 capital, including the fully phased-in Tier 1 capital deductions that apply beginning January 1, 2018.

The pro forma transitional and fully phased-in supplementary leverage exposures and ratios are non-GAAP financial measures because they were not yet effective at December 31, 2017.

Total Loss-Absorbing Capacity, Long-Term Debt and Clean Holding Company Requirements

On December 15, 2016, the Federal Reserve adopted a final rule for top-tier BHCs of U.S. G-SIB (“covered BHC”), including the Parent Company, that establishes external TLAC, long-term debt (“LTD”) and clean holding company requirements. The final rule contains various definitions and restrictions, such as requiring eligible LTD to be issued by the covered BHC and be unsecured, have a maturity of one year or more from the date of issuance and not have certain derivative-linked features typically associated with certain types of structured notes. We expect to be in compliance with all requirements of the rule by January 1, 2019, the date that compliance is required.

The Federal Reserve’s proposed modifications to the enhanced SLR would also make corresponding changes to the calibration of the TLAC leverage-based requirements, as well as certain other technical changes to the TLAC rule. For a further discussion of the enhanced SLR, see “Regulatory Developments—Proposed Modifications to the Enhanced SLR and to the SLR Applicable to Our U.S. Bank Subsidiaries” herein.

For a further discussion of TLAC and LTD requirements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—Total Loss-Absorbing Capacity, Long-Term Debt and Clean Holding Company Requirements” in the 2017 Form 10-K. For discussions about the interaction between the SPOE resolution strategy and the TLAC and LTD requirements, see “Business—Supervision and Regulation—Financial Holding Company—Resolution and Recovery Planning” and “Risk Factors—Legal, Regulatory and Compliance Risk” in the 2017 Form 10-K.

Capital Plans and Stress Tests

Pursuant to the Dodd-Frank Act, the Federal Reserve has adopted capital planning and stress test requirements for large BHCs, including us, which form part of the Federal Reserve’s annual CCAR framework.

We submitted our 2018 Capital Plan (“Capital Plan”) and company-run stress test results to the Federal Reserve on April 5, 2018. We expect that the Federal Reserve will provide its response to our 2018 Capital Plan by June 30, 2018. There could be a range of potential outcomes to our Capital Plan whereby the Federal Reserve could object to, or otherwise require us to modify, such plan. See “Risk Factors” in the 2017 Form 10-K. The Federal Reserve is expected to publish summary results of the CCAR and Dodd-Frank Act supervisory stress tests of each large BHC, including us, by

March 2018 Form 10-Q 24

Management’s Discussion and Analysis

June 30, 2018. We are required to disclose a summary of the results of our company-run stress tests within 15 days of the date the Federal Reserve discloses the results of the supervisory stress tests. In addition, we must submit the results of our mid-cycle company-run stress test to the Federal Reserve by October 5, 2018 and disclose a summary of the results between October 5, 2018 and November 4, 2018.

The Dodd-Frank Act also requires each of our U.S. Bank Subsidiaries to conduct an annual stress test. MSBNA and MSPBNA submitted their 2018 annual company-run stress tests to the OCC on April 5, 2018 and must publish a summary of their stress test results between June 15, 2018 and July 15, 2018.

For a further discussion of our capital plans and stress tests, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—Capital Plans and Stress Tests” in the 2017 Form 10-K.

Attribution of Average Common Equity According to the Required Capital Framework

Our required capital (“Required Capital”) estimation is based on the Required Capital framework, an internal capital adequacy measure. Common equity attribution to the business segments is based on capital usage calculated under the Required Capital framework, as well as each business segment’s relative contribution to our total Required Capital.

The Required Capital framework is a risk-based and leverage use-of-capital measure, which is compared with our regulatory capital to ensure that we maintain an amount of going concern capital after absorbing potential losses from stress events, where applicable, at a point in time. We define the difference between our total average common equity and the sum of the average common equity amounts allocated to our business segments as Parent Company equity. We generally hold Parent Company equity for prospective regulatory requirements, organic growth, acquisitions and other capital needs.

Common equity estimation and attribution to the business segments are based on our fully phased-in regulatory capital rules. The amount of capital allocated to the business segments is generally set at the beginning of each year and remains fixed throughout the year until the next annual reset unless a significant business change occurs (e.g., acquisition or disposition). Differences between available and Required Capital are attributed to Parent Company equity during the year.

The Required Capital framework is expected to evolve over time in response to changes in the business and regulatory environment, for example, to incorporate changes in stress

testing or enhancements to modeling techniques. We will continue to evaluate the framework with respect to the impact of future regulatory requirements, as appropriate.

Average Common Equity Attribution¹

	Three Months Ended March 31,
$ in billions	2018		2017
Institutional Securities	$	40.8	$	40.2
Wealth Management		16.8		17.2
Investment Management		2.6		2.4
Parent Company		8.8		9.2
Total	$	69.0	$	69.0

1. Average common equity is a non-GAAP financial measure. See “Selected Non-GAAP Financial Information” herein.

Regulatory Developments

Resolution and Recovery Planning

Pursuant to the Dodd-Frank Act, we are required to periodically submit to the Federal Reserve and the FDIC a resolution plan that describes our strategy for a rapid and orderly resolution under the U.S. Bankruptcy Code in the event of our material financial distress or failure.

Our preferred resolution strategy, which is set out in our 2017 resolution plan, is an SPOE strategy. The Parent Company has amended and restated its support agreement with its material entities, as defined in our 2017 resolution plan. Under the secured amended and restated support agreement, upon the occurrence of a resolution scenario, the Parent Company would be obligated to contribute or loan on a subordinated basis all of its contributable material assets, other than shares in subsidiaries of the Parent Company and certain intercompany receivables, to provide capital and liquidity, as applicable, to our material entities.

The obligations of the Parent Company under the secured amended and restated support agreement are in most cases secured on a senior basis by the assets of the Parent Company (other than shares in subsidiaries of the Parent Company). As a result, claims of our material entities against the assets of the Parent Company (other than shares in subsidiaries of the Parent Company) are effectively senior to unsecured obligations of the Parent Company.

For more information about resolution and recovery planning requirements and our activities in these areas, including the implications of such activities in a resolution scenario, see “Business—Supervision and Regulation—Financial Holding Company—Resolution and Recovery Planning” and “Risk Factors—Legal, Regulatory and Compliance Risk” in the 2017 Form 10-K.

25 March 2018 Form 10-Q

Management’s Discussion and Analysis

Volcker Rule

The Volcker Rule prohibits “banking entities,” including us and our affiliates, from engaging in certain “proprietary trading” activities, as defined in the Volcker Rule, subject to exemptions for underwriting, market-making-related activities, risk-mitigating hedging and certain other activities. The Volcker Rule also prohibits certain investments and relationships by banking entities with “covered funds,” with a number of exemptions and exclusions. For more information about the Volcker Rule, see “Business—Supervision and Regulation—Activities Restrictions under the Volcker Rule” in the 2017 Form 10-K.

U.S. Department of Labor Conflict of Interest Rule and SEC Standards of Conduct for Investment Professionals

The U.S. DOL’s final Conflict of Interest Rule under ERISA went into effect on June 9, 2017, with certain aspects subject to phased-in compliance. Full compliance with the rule’s related exemptions was scheduled to be required by July 1, 2019. However, on March 15, 2018, the U.S. Court of Appeals for the Fifth Circuit vacated the Conflict of Interest Rule and accompanying exemptions in their entirety. While the U.S. DOL could appeal to the U.S. Supreme Court, the order to vacate the rule could take effect as soon as May 7, 2018. For a discussion of the U.S. DOL Conflict of Interest Rule, see “Business—Supervision and Regulation—Institutional Securities and Wealth Management” in the 2017 Form 10-K.

On April 18, 2018, the SEC released for public comment a package of proposed rulemaking on the standards of conduct and required disclosures for broker-dealers and investment advisers. One of the proposals, entitled “Regulation Best Interest,” would require broker-dealers to act in the “best interest” of retail customers at the time a recommendation is made without placing the financial or other interests of the broker-dealer ahead of the interest of the retail customer. Additionally, the SEC proposed a new requirement for both broker-dealers and investment advisers to provide a brief relationship summary to retail investors with information intended to clarify the relationship between the parties. Finally, the SEC issued a proposed interpretation regarding the fiduciary duty that investment advisers owe their clients. We are reviewing the SEC’s package of proposed rules.

Proposed Stress Buffer Requirements

On April 10, 2018, the Federal Reserve issued a proposal to integrate its annual capital planning and stress testing requirements with certain ongoing regulatory capital requirements. The proposal, which would apply to certain BHCs, including us, would introduce a stress capital buffer and a stress leverage buffer (collectively, “Stress Buffer

Requirements”) and related changes to the capital planning and stress testing processes. Under the proposal, Stress Buffer Requirements would apply only with respect to the Standardized Approach and Tier 1 leverage regulatory capital requirements and would generally be effective on October 1, 2019.

In the Standardized Approach, the stress capital buffer would replace the existing Common Equity Tier 1 capital conservation buffer, which will be 2.5% as of January 1, 2019. The Standardized Approach stress capital buffer would equal the greater of (i) the maximum decline in our Common Equity Tier 1 capital ratio under the severely adverse scenario over the supervisory stress test measurement period, plus the sum of the ratios of the dollar amount of our planned common stock dividends to our projected RWA for each of the fourth through seventh quarters of the supervisory stress test projection period, and (ii) 2.5%. Regulatory capital requirements under the Standardized Approach would include the stress capital buffer, as summarized above, as well as our Common Equity Tier 1 G-SIB capital surcharge and any applicable Common Equity Tier 1 CCyB.

Like the stress capital buffer, the stress leverage buffer would be calculated based on the results of our annual supervisory stress tests. The stress leverage buffer would equal the maximum decline in our Tier 1 leverage ratio under the severely adverse scenario, plus the sum of the ratios of the dollar amount of our planned common stock dividends to our projected leverage ratio denominator for each of the fourth through seventh quarters of the supervisory stress test projection period. No floor would be established for the stress leverage buffer, which would apply in addition to the current minimum Tier 1 leverage ratio of 4%.

The proposal would make related changes to capital planning and stress testing processes for BHCs subject to the Stress Buffer Requirements. In particular, the proposal would limit projected capital actions to planned common stock dividends in the fourth through seventh quarters of the supervisory stress test projection period and would assume that BHCs maintain a constant level of assets and RWA throughout the supervisory stress test projection period.

The proposal does not change regulatory capital requirements under the Advanced Approach or the SLR, although the Federal Reserve and the OCC have separately proposed to modify the enhanced SLR requirements, as summarized below. If the proposal is adopted in its current form, limitations on capital distributions and discretionary bonus payments to executive officers would be determined by the most stringent limitation, if any, as determined under the Standardized Approach or the Tier 1 leverage ratio, inclusive of Stress Buffer Requirements, or the Advanced Approach or SLR or TLAC requirements, inclusive of applicable buffers.

March 2018 Form 10-Q 26

Management’s Discussion and Analysis

Proposed Modifications to the Enhanced SLR and to the SLR Applicable to Our U.S. Bank Subsidiaries

On April 11, 2018, the Federal Reserve proposed modifications to the enhanced SLR that would replace the current 2% enhanced SLR buffer applicable to U.S. G-SIBs, including us, with a leverage buffer equal to 50% of our Common Equity Tier 1 G-SIB capital surcharge, which is currently 3%. Under the proposal, our enhanced SLR buffer would become 1.5%, for a total enhanced SLR requirement of 4.5%, assuming that our G-SIB capital surcharge remains the same when the proposal becomes effective, which may be as early as 2018 under the proposal.

As part of the same proposal, the Federal Reserve and the OCC also proposed to align the well-capitalized SLR standard applicable to our U.S. Bank Subsidiaries with the proposed enhanced SLR buffer applicable to the Firm. Under the proposal, the well-capitalized SLR requirement for our U.S. Bank Subsidiaries would change from the current 6% to 3% plus 50% of our current Common Equity Tier 1 G-SIB capital surcharge, for a total well-capitalized SLR requirement of 4.5%, assuming that our G-SIB capital surcharge remains the same when the proposal becomes effective.

Proposed Regulatory Capital Adjustments Related to Implementation of the Current Expected Credit Losses Methodology

On April 17, 2018, the U.S. banking agencies issued a proposal to revise the regulatory capital framework applicable to banking organizations, including us and our U.S. Bank Subsidiaries, to address the new accounting standard for credit losses, known as a CECL methodology. For a further discussion of CECL, see “Accounting Development Updates— Financial Instruments—Credit Losses” herein.

The proposal modifies the regulatory capital rules to identify which credit loss allowances under the new accounting standard are eligible for inclusion in regulatory capital and to provide banking organizations the option to phase in, over a three-year period, the adverse effects on regulatory capital that may result from the adoption of the new accounting standard. The proposal requires a banking organization that has adopted a CECL methodology to include the provision for credit losses beginning in the 2020 stress test cycle.

U.K. Withdrawal from the E.U.

Following the U.K. electorate vote to leave the E.U., the U.K. invoked Article 50 of the Lisbon Treaty on March 29, 2017, which triggered a two-year period, subject to extension

(which would need the unanimous approval of the E.U. Member States), during which the U.K. government has been negotiating its withdrawal agreement with the E.U. For further discussion of the potential impact of the U.K.’s withdrawal from the E.U. on our operations, see “Risk Factors—International Risk” in the 2017 Form 10-K. For further information regarding our exposure to the U.K., see also “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Credit Risk—Country Risk Exposure.”

Expected Replacement of London Interbank Offered Rate

Central banks around the world, including the Federal Reserve, have commissioned working groups of market participants and official sector representatives with the goal of finding suitable replacements for LIBOR based on observable market transactions. It is expected that a transition away from the widespread use of LIBOR to alternative rates will occur over the course of the next few years. The U.K. Financial Conduct Authority (“FCA”), which regulates LIBOR, has announced that it has commitments from panel banks to continue to contribute to LIBOR through the end of 2021, but that it will not use its powers to compel contributions beyond such date. Accordingly, there is considerable uncertainty regarding the publication of such rates beyond 2021.

On April 3, 2018, the Federal Reserve Bank of New York commenced publication of three reference rates based on overnight U.S. Treasury repurchase agreement transactions, including the Secured Overnight Financing Rate (“SOFR”), which has been recommended as an alternative to U.S. dollar LIBOR by the Alternative Reference Rates Committee. Further, the Bank of England has commenced publication of a reformed Sterling Overnight Index Average (“reformed SONIA”), comprised of a broader set of overnight Sterling money market transactions, as of April 23, 2018. Reformed SONIA has been recommended as the alternative to Sterling LIBOR by the Working Group on Sterling Risk-Free Reference Rates.

Although the full impact of such reforms and actions, together with any transition away from LIBOR, including the potential or actual discontinuance of LIBOR publication, remains unclear, these changes may have an adverse impact on the value of, return on and trading markets for a broad array of financial products, including any LIBOR-based securities, loans and derivatives that are included in our financial assets and liabilities. Such reforms and actions may also require extensive changes to the contracts that govern these LIBOR-based products, as well as our systems and processes.

27 March 2018 Form 10-Q

Management’s Discussion and Analysis

Effects of Inflation and Changes in Interest and Foreign Exchange Rates

For a discussion of the effects of inflation and changes in interest and foreign exchange rates on our business and financial results and strategies to mitigate potential exposures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Effects of Inflation and Changes in Interest and Foreign Exchange Rates” in the 2017 Form 10-K.

Off-Balance Sheet Arrangements and Contractual Obligations

Off-Balance Sheet Arrangements

We enter into various off-balance sheet arrangements, including through unconsolidated SPEs and lending-related financial instruments (e.g., guarantees and commitments), primarily in connection with the Institutional Securities and Investment Management business segments.

We utilize SPEs primarily in connection with securitization activities. For information on our securitization activities, see Note 12 to the financial statements.

For information on our commitments, obligations under certain guarantee arrangements and indemnities, see Note 11 to the financial statements. For further information on our lending commitments, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Credit Risk—Lending Activities Included in Loans and Trading Assets.”

Contractual Obligations

For a discussion about our contractual obligations, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Contractual Obligations” in the 2017 Form 10-K.

March 2018 Form 10-Q 28

Quantitative and Qualitative Disclosures about Market Risk

Management believes effective risk management is vital to the success of our business activities. For a discussion of our risk management functions, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management” in the 2017 Form 10-K.

Market Risk

Market risk refers to the risk that a change in the level of one or more market prices, rates, indices, volatilities, correlations or other market factors, such as market liquidity, will result in losses for a position or portfolio. Generally, we incur market risk as a result of trading, investing and client facilitation activities, principally within the Institutional Securities business segment where the substantial majority of our VaR for market risk exposures is generated. In addition, we incur market risk within the Wealth Management and Investment Management business segments. The Wealth Management business segment primarily incurs non-trading market risk from lending and deposit-taking activities. The Investment Management business segment primarily incurs non-trading market risk from capital investments in alternative and other funds. For a further discussion of market risk, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Market Risk” in the 2017 Form 10-K.

Value-at-Risk    

The statistical technique known as VaR is one of the tools we use to measure, monitor and review the market risk exposures of our trading portfolios. The Market Risk Department calculates and distributes daily VaR-based risk measures to various levels of management.

VaR Methodology, Assumptions and Limitations.    For information regarding our VaR methodology, assumptions and limitations, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Market Risk—Sales and Trading and Related Activities—VaR Methodology, Assumptions and Limitations” in the 2017 Form 10-K.

We utilize the same VaR model for risk management purposes and for regulatory capital calculations. Our regulators have approved our VaR model for use in regulatory calculations.

The portfolio of positions used for our VaR for risk management purposes (“Management VaR”) differs from that used for regulatory capital requirements (“Regulatory VaR”). Management VaR contains certain positions that are excluded from Regulatory VaR. Examples include CVA and related hedges, as well as loans that are carried at fair value and associated hedges.

The following table presents the Management VaR for the Trading portfolio, on a period-end, quarterly average and quarterly high and low basis. To further enhance the transparency of the traded market risk, the Credit Portfolio VaR has been disclosed as a separate category from the Primary Risk Categories. The Credit Portfolio includes counterparty CVA and related hedges, as well as loans that are carried at fair value and associated hedges.

Trading Risks

95%/One-Day Management VaR

	95%/One-Day VaR for the Three Months Ended March 31, 2018
$ in millions	Period     End			Average			High		Low
Interest rate and credit spread	$	41		$	35		$	46	$	30
Equity price		16			14			17		11
Foreign exchange rate		10			9			13		7
Commodity price		10			9			11		7
Less: Diversification benefit1, 2		(27	)		(25	)		N/A		N/A
Primary Risk Categories	$	50		$	42		$	51	$	36
Credit Portfolio		11			10			11		9
Less: Diversification benefit1, 2		(7	)		(6	)		N/A		N/A
Total Management VaR	$	54		$	46		$	55	$	40
	95%/One-Day VaR for the Three Months Ended December 31, 2017
$ in millions	Period End			Average			High		Low
Interest rate and credit spread	$	32		$	29		$	36	$	24
Equity price		11			13			15		10
Foreign exchange rate		9			8			11		6
Commodity price		7			8			11		6
Less: Diversification benefit1, 2		(20	)		(23	)		N/A		N/A
Primary Risk Categories	$	39		$	35		$	41	$	30
Credit Portfolio		9			9			10		8
Less: Diversification benefit1, 2		(5	)		(6	)		N/A		N/A
Total Management VaR	$	43		$	38		$	44	$	34

1. Diversification benefit equals the difference between the total Management VaR and the sum of the component VaRs. This benefit arises because the simulated one-day losses for each of the components occur on different days; similar diversification benefits also are taken into account within each component.

2. The high and low VaR values for the total Management VaR and each of the component VaRs might have occurred on different days during the quarter, and therefore, the diversification benefit is not an applicable measure.

Average total Management VaR and average Management VaR for the Primary Risk Categories of $46 million and $42 million, respectively, increased from the three-months ended December 31, 2017, primarily as a result of increases in trading inventory across the Fixed Income Macro and Credit trading businesses in the Institutional Securities business segment and increased market volatility, particularly in Equities.

29 March 2018 Form 10-Q

Risk Disclosures

Distribution of VaR Statistics and Net Revenues for the current quarter.    One method of evaluating the reasonableness of our VaR model as a measure of our potential volatility of net revenues is to compare VaR with corresponding actual trading revenues. Assuming no intraday trading, for a 95%/one-day VaR, the expected number of times that trading losses should exceed VaR during the year is 13, and, in general, if trading losses were to exceed VaR more than 21 times in a year, the adequacy of the VaR model would be questioned.

We evaluate the reasonableness of our VaR model by comparing the potential declines in portfolio values generated by the model with corresponding actual trading results for the Firm, as well as individual business units. For days where losses exceed the VaR statistic, we examine the drivers of trading losses to evaluate the VaR model’s accuracy relative to realized trading results. During the current quarter, we experienced net trading losses on one day, which was not in excess of the 95%/one-day Total Management VaR.

The distribution of VaR statistics and net revenues is presented in the following histograms for the Total Trading populations.

Total Trading.    As shown in the 95%/One-Day Management VaR table, the average 95%/one-day total Management VaR for the current quarter was $46 million. The following histogram presents the distribution of the daily 95%/one-day total Management VaR for the current quarter.

Daily 95%/One-Day Total Management VaR for the Current Quarter

($ in millions)

The following histogram shows the distribution for the current quarter of daily net trading revenues, including profits and losses from Interest rate and credit spread, Equity price, Foreign exchange rate, Commodity price, and Credit Portfolio positions and intraday trading activities, for our

Trading businesses. Daily net trading revenues also include intraday trading activities but exclude certain items not captured in the VaR model, such as fees, commissions and net interest income. Daily net trading revenues differ from the definition of revenues required for Regulatory VaR backtesting, which further excludes intraday trading.

Daily Net Trading Revenues for the Current Quarter

($ in millions)

Non-Trading Risks

We believe that sensitivity analysis is an appropriate representation of our non-trading risks. The following sensitivity analyses cover substantially all of the non-trading risk in our portfolio.

Exposure Related to Our Own Credit Spread.

Credit Spread Risk Sensitivity¹

$ in millions	At March 31, 2018		At December 31, 2017
Derivatives	$	6	$	6
Funding liabilities2		31		29

1. Amounts represent the increase in value for each 1 bps widening of our credit spread.

2. Relates to structured note liabilities carried at fair value.

Interest Rate Risk Sensitivity.    The following table presents an analysis of selected instantaneous upward and downward parallel interest rate shocks on net interest income over the next 12 months for our U.S. Bank Subsidiaries. These shocks are applied to our 12-month forecast for our U.S. Bank Subsidiaries, which incorporates market expectations of interest rates and our forecasted business activity, including our deposit deployment strategy and asset-liability management hedges.

March 2018 Form 10-Q 30

Risk Disclosures

U.S. Bank Subsidiaries’ Net Interest Income Sensitivity Analysis

$ in millions	At March 31, 2018			At December 31, 2017
Basis point change
+200	$	438		$	489
+100		226			367
-100		(464	)		(500	)

We do not manage to any single rate scenario but rather manage net interest income in our U.S. Bank Subsidiaries to optimize across a range of possible outcomes, including non-parallel rate change scenarios. The sensitivity analysis assumes that we take no action in response to these scenarios, assumes there are no changes in other macroeconomic variables normally correlated with changes in interest rates, and includes subjective assumptions regarding customer and market re-pricing behavior and other factors. The change in sensitivity to interest rates between March 31, 2018 and December 31, 2017 is related to overall changes in our asset-liability profile and higher market rates.

Investments.    We have exposure to public and private companies through direct investments, as well as through funds that invest in these assets. These investments are predominantly equity positions with long investment horizons, a portion of which are for business facilitation purposes. The market risk related to these investments is measured by estimating the potential reduction in net income associated with a 10% decline in investment values and related impact on performance fees.

Investments Sensitivity, Including Related Performance Fees

	Loss from 10% Decline
$ in millions	At March 31, 2018		At December 31, 2017
Investments related to Investment
Management activities	$	321	$	316
Other investments:
MUMSS		172		168
Other Firm investments		187		178

MUMSS—Mitsubishi UFJ Morgan Stanley Securities Co., LTD.

Equity Market Sensitivity.    In the Wealth Management and Investment Management business segments, certain fee-based revenue streams are driven by the value of clients’ equity holdings. The overall level of revenues for these streams also depends on multiple additional factors that include, but are not limited to, the level and duration of the equity market increase or decline, price volatility, the geographic and industry mix of client assets, the rate and magnitude of client investments and redemptions, and the impact of such market

increase or decline and price volatility on client behavior. Therefore, overall revenues do not correlate completely with changes in the equity markets.

Credit Risk

Credit risk refers to the risk of loss arising when a borrower, counterparty or issuer does not meet its financial obligations to us. We primarily incur credit risk exposure to institutions and individuals through our Institutional Securities and Wealth Management business segments. For a further discussion of our credit risks, see “Quantitative and Qualitative Disclosures about Market Risk–Risk Management–Credit Risk” in the 2017 Form 10-K. Also, see Notes 7 and 11 to the financial statements for additional information about our loans and lending commitments, respectively.

Lending Activities Included in Loans and Trading Assets

We provide loans and lending commitments to a variety of customers, from large corporate and institutional clients to high net worth individuals. In addition, we purchase loans in the secondary market. In the balance sheets, these loans and lending commitments are carried as held for investment, which are recorded at amortized cost; as held for sale, which are recorded at the lower of cost or fair value; or at fair value with changes in fair value recorded in earnings. Loans held for investment and loans held for sale are classified in Loans, and loans held at fair value are classified in Trading assets in the balance sheets. See Notes 3, 7 and 11 to the financial statements for further information.

31 March 2018 Form 10-Q

Risk Disclosures

Loans and Lending Commitments

	At March 31, 2018
$ in millions	IS			WM			IM1		Total
Corporate loans	$	17,005		$	14,893		$	5	$	31,903
Consumer loans		—			26,877			—		26,877
Residential real estate loans		—			26,566			—		26,566
Wholesale real estate loans		10,021			—			—		10,021
Loans held for investment, gross of allowance		27,026			68,336			5		95,367
Allowance for loan losses		(201	)		(42	)		—		(243	)
Loans held for investment, net of allowance		26,825			68,294			5		95,124
Corporate loans		12,000			—			—		12,000
Residential real estate loans		1			32			—		33
Wholesale real estate loans		1,978			—			—		1,978
Loans held for sale		13,979			32			—		14,011
Corporate loans		9,323			—			23		9,346
Residential real estate loans		706			—			—		706
Wholesale real estate loans		1,770			—			1,171		2,941
Loans held at fair value		11,799			—			1,194		12,993
Total loans		52,603			68,326			1,199		122,128
Lending commitments2, 3		109,025			10,404			187		119,616
Total loans and lending commitments2, 3	$	161,628		$	78,730		$	1,386	$	241,744

	At December 31, 2017
$ in millions	IS			WM			IM		Total
Corporate loans	$	15,332		$	14,417		$	5	$	29,754
Consumer loans		—			26,808			—		26,808
Residential real estate loans		—			26,635			—		26,635
Wholesale real estate loans		9,980			—			—		9,980
Loans held for investment, gross of allowance		25,312			67,860			5		93,177
Allowance for loan losses		(182	)		(42	)		—		(224	)
Loans held for investment, net of allowance		25,130			67,818			5		92,953
Corporate loans		9,456			—			—		9,456
Residential real estate loans		1			34			—		35
Wholesale real estate loans		1,682			—			—		1,682
Loans held for sale		11,139			34			—		11,173
Corporate loans		8,336			—			22		8,358
Residential real estate loans		799			—			—		799
Wholesale real estate loans		1,579			—			—		1,579
Loans held at fair value		10,714			—			22		10,736
Total loans		46,983			67,852			27		114,862
Lending commitments2, 3		92,588			9,481			—		102,069
Total loans and lending commitments2, 3	$	139,571		$	77,333		$	27	$	216,931

1. Investment Management business segment loans are entered into in conjunction with certain investment advisory activities. The increase in fair value loans in the current quarter is a result of the consolidation of a fund managed by Mesa West Capital, LLC that primarily invests in commercial real estate loans with remaining maturities of less than 5 years.

2. Lending commitments represent the notional amount of legally binding obligations to provide funding to clients for lending transactions. Since commitments associated with these business activities may expire unused or may not be utilized to full capacity, they do not necessarily reflect the actual future cash funding requirements.

3. For syndications led by us, any lending commitments accepted by the borrower but not yet closed are net of amounts syndicated. For syndications that we participate in and do not lead, any lending commitments accepted by the borrower but not yet closed include only the amount that we expect will be allocated from the lead syndicate bank. Due to the nature of our obligations under the commitments, these amounts include certain commitments participated to third parties.

Total loans and lending commitments increased by approximately $25 billion in the current quarter, primarily due to increases in Corporate lending commitments within the Institutional Securities business segment.

Our credit exposure from our loans and lending commitments is measured in accordance with our internal risk management standards. Risk factors considered in determining the aggregate allowance for loan and commitment losses include the borrower’s financial strength, seniority of the loan, collateral type, volatility of collateral value, debt cushion, loan-to-value ratio, debt service ratio, covenants and counterparty type. Qualitative and environmental factors such as economic and business conditions, nature and volume of the portfolio and lending terms, and volume and severity of past due loans may also be considered.

Allowance for Loans and Lending Commitments Held for Investment

$ in millions	At March 31, 2018		At December 31, 2017
Loans	$	243	$	224
Lending commitments		205		198

The aggregate allowance for loans and lending commitment losses increased during the current quarter primarily due to overall portfolio changes and qualitative and environmental factors impacting the inherent allowance within the Institutional Securities business segment. See Note 7 to the financial statements for further information.

Status of Loans Held for Investment

	At March 31, 2018				At December 31, 2017
	IS		WM		IS		WM
Current		99.7%		99.9%		99.5%		99.9%
Non-accrual1		0.3%		0.1%		0.5%		0.1%

1. These loans are on nonaccrual status because the loans were past due for a period of 90 days or more or payment of principal or interest was in doubt.

March 2018 Form 10-Q 32

Risk Disclosures

Institutional Securities 

In connection with certain Institutional Securities business segment activities, we provide loans and lending commitments to a diverse group of corporate and other institutional clients. These activities include originating and purchasing corporate loans, commercial and residential mortgage lending, asset-backed lending, financing extended to equities and commodities customers and loans to municipalities. These loans and lending commitments may have varying terms; may be senior or subordinated; may be secured or unsecured; are generally contingent upon representations, warranties and contractual conditions applicable to the borrower; and may be syndicated, traded or hedged by us.

We also participate in securitization activities, whereby we extend short-term or long-term funding to clients through loans and lending commitments that are secured by the assets of the borrower and generally provide for over-collateralization, including commercial real estate loans, loans secured by loan pools, corporate loans and secured lines of revolving credit. Credit risk with respect to these loans and lending commitments arises from the failure of a borrower to perform according to the terms of the loan agreement or a decline in the underlying collateral value. See Note 12 to the financial statements for information about our securitization activities. In addition, a collateral management group monitors collateral levels against requirements and oversees the administration of the collateral function. See Note 6 to the financial statements for additional information about our collateralized transactions.

Institutional Securities Loans and Lending Commitments¹

	At March 31, 2018
	Years to Maturity
$ in millions	Less than 1		1-3		3-5		Over 5		Total
Loans
AA	$	—	$	450	$	28	$	5	$	483
A		1,435		2,262		1,287		389		5,373
BBB		3,626		8,398		3,709		875		16,608
NIG		6,213		10,940		7,521		3,199		27,873
Unrated2		59		98		262		1,847		2,266
Total loans		11,333		22,148		12,807		6,315		52,603
Lending commitments
AAA		—		165		—		—		165
AA		3,127		1,348		2,707		—		7,182
A		4,374		14,521		11,316		425		30,636
BBB		4,865		14,276		18,546		166		37,853
NIG		1,436		11,241		13,636		6,801		33,114
Unrated2		1		25		10		39		75
Total lending commitments		13,803		41,576		46,215		7,431		109,025
Total exposure	$	25,136	$	63,724	$	59,022	$	13,746	$	161,628

	At December 31, 2017
	Years to Maturity
$ in millions	Less than 1		1-3		3-5		Over 5		Total
Loans
AA	$	14	$	503	$	30	$	5	$	552
A		1,608		1,710		1,235		693		5,246
BBB		2,791		6,558		3,752		646		13,747
NIG		4,760		12,311		4,480		3,245		24,796
Unrated2		243		291		621		1,487		2,642
Total loans		9,416		21,373		10,118		6,076		46,983
Lending commitments
AAA		—		165		—		—		165
AA		3,745		1,108		3,002		—		7,855
A		3,769		5,533		11,774		197		21,273
BBB		3,987		12,345		16,818		1,095		34,245
NIG		4,159		9,776		12,279		2,698		28,912
Unrated2		9		40		42		47		138
Total lending commitments		15,669		28,967		43,915		4,037		92,588
Total exposure	$	25,085	$	50,340	$	54,033	$	10,113	$	139,571

NIG–Non-investment grade

1. Obligor credit ratings are determined by the Credit Risk Management department.

2. Unrated loans and lending commitments are primarily trading positions that are measured at fair value and risk managed as a component of Market Risk. For a further discussion of our Market Risk, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Market Risk” herein.

Institutional Securities Loans and Lending Commitments by Industry

$ in millions	At March 31, 2018		At December 31, 2017
Industry
Real estate	$	28,847	$	28,426
Financials		27,224		22,112
Consumer discretionary		15,706		11,555
Industrials		13,768		11,090
Information technology		12,434		11,862
Insurance		10,747		4,739
Healthcare		10,456		9,956
Energy		10,354		10,233
Utilities		10,296		9,592
Consumer staples		10,054		8,315
Materials		5,123		5,069
Telecommunications services		4,533		4,172
Other		2,086		2,450
Total	$	161,628	$	139,571

Institutional Securities business segment loans and lending commitments are mainly related to relationship-based and event-driven lending to select corporate clients. Relationship-based loans and lending commitments are used for general corporate purposes, working capital and liquidity purposes by our investment banking clients and typically consist of

33 March 2018 Form 10-Q

Risk Disclosures

revolving lines of credit, letter of credit facilities and term loans. In connection with the relationship-based lending activities, we enter into hedges, as detailed below.

Relationship-based Lending Activities Hedges—Notional Amounts

$ in billions	At March 31, 2018		At December 31, 2017
Single-name and index CDS	$	15.0	$	16.6

Event-Driven Loans and Lending Commitments

	At March 31, 2018
	Years to Maturity
$ in millions	Less than 1		1-3		3-5		Over 5		Total
Loans	$	2,631	$	689	$	518	$	1,835	$	5,673
Lending commitments		2,902		11,963		3,262		3,982		22,109
Total loans and lending commitments	$	5,533	$	12,652	$	3,780	$	5,817	$	27,782

	At December 31, 2017
	Years to Maturity
$ in millions	Less than 1		1-3		3-5		Over 5		Total
Loans	$	1,458	$	1,058	$	639	$	2,012	$	5,167
Lending commitments		1,272		3,206		2,091		1,874		8,443
Total loans and lending commitments	$	2,730	$	4,264	$	2,730	$	3,886	$	13,610

Event-driven loans and lending commitments are associated with a particular event or transaction, such as to support client merger, acquisition, recapitalization and project finance activities. Event-driven loans and lending commitments typically consist of revolving lines of credit, term loans and bridge loans. The increase in event-driven lending commitments in the current quarter is primarily due to an increase in held-for-sale commitments driven by new client transactions in the latter part of the quarter.

Wealth Management

The principal Wealth Management lending activities include securities-based lending and residential real estate loans.

Securities-based lending provided to our retail clients is primarily conducted through our Liquidity Access Line platform. For more information about our securities-based lending and residential real estate loans, see “Quantitative and Qualitative Disclosures about Market Risk–Risk Management–Credit Risk–Lending Activities” in the 2017 Form 10-K.

Wealth Management Loans and Lending Commitments

	At March 31, 2018
	Contractual Years to Maturity
$ in millions	Less than 1		1-3		3-5		Over 5		Total
Securities-based lending and other loans1	$	34,730	$	3,789	$	1,849	$	1,382	$	41,750
Residential real estate loans		—		30		10		26,536		26,576
Total loans	$	34,730	$	3,819	$	1,859	$	27,918	$	68,326
Lending commitments		7,392		2,283		444		285		10,404
Total loans and lending commitments	$	42,122	$	6,102	$	2,303	$	28,203	$	78,730

	At December 31, 2017
	Contractual Years to Maturity
$ in millions	Less than 1		1-3		3-5		Over 5		Total
Securities-based lending and other loans1	$	34,389	$	3,687	$	1,899	$	1,231	$	41,206
Residential real estate loans		—		24		15		26,607		26,646
Total loans	$	34,389	$	3,711	$	1,914	$	27,838	$	67,852
Lending commitments		7,253		1,827		120		281		9,481
Total loans and lending commitments	$	41,642	$	5,538	$	2,034	$	28,119	$	77,333

1. The Liquidity Access Line platform had an outstanding loan balance of $32.1 billion and $32.2 billion at March 31, 2018 and December 31, 2017, respectively.

For the current quarter, loans and lending commitments associated with the Wealth Management business segment lending activities increased by approximately 2%, primarily due to growth in securities-based lending and other loans.

Lending Activities Included in Customer and Other Receivables

Margin Loans

	At March 31, 2018
$ in millions	IS		WM		Total
Net customer receivables representing margin loans	$	22,396	$	11,986	$	34,382

	At December 31, 2017
$ in millions	IS		WM		Total
Net customer receivables representing margin loans	$	19,977	$	12,135	$	32,112

The Institutional Securities and Wealth Management business segments provide margin lending arrangements which allow the client to borrow against the value of qualifying securities. Margin lending activities generally have minimal credit risk due to the value of collateral held and their short-term nature.

March 2018 Form 10-Q 34

Risk Disclosures

Employee Loans

$ in millions	At March 31, 2018			At December 31, 2017
Employee loans:
Balance	$	3,687		$	4,185
Allowance for loan losses		(75	)		(77	)
Balance, net	$	3,612		$	4,108
Repayment term range, in years		1 to 20			1 to 20

Employee loans are generally granted to retain and recruit certain employees, are full recourse and generally require periodic repayments. We establish an allowance for loan amounts to terminated employees that we do not consider recoverable, which is recorded in Compensation and benefits expense. See Note 7 to the financial statements for a further description of our employee loans.

Credit Exposure—Derivatives

We incur credit risk as a dealer in OTC derivatives. Credit risk with respect to derivative instruments arises from the possibility that a counterparty may fail to perform according to the terms of the contract. In connection with our OTC derivative activities, we generally enter into master netting agreements and collateral arrangements with counterparties. These agreements provide us with the ability to demand collateral, as well as to liquidate collateral and offset receivables and payables covered under the same master netting agreement in the event of counterparty default.

We manage our trading positions by employing a variety of risk mitigation strategies. These strategies include diversification of risk exposures and hedging. Hedging activities consist of the purchase or sale of positions in related securities and financial instruments, including a variety of derivative products (e.g., futures, forwards, swaps and options). For a discussion of our credit exposure and related credit derivative contracts, see “Quantitative and Qualitative disclosures about Market Risk–Risk Management–Credit Risk–Credit Exposure–Derivatives” in the 2017 Form 10-K.

Fair values as shown below represent the Firm’s net exposure to counterparties related to its OTC derivative products. Obligor credit ratings are determined internally by the Credit Risk Management department.

Counterparty Credit Rating and Remaining Contractual Maturity of OTC Derivative Assets at Fair Value

	Credit Rating
													Non-
													investment
$ in millions	AAA			AA			A			BBB			grade			Total
At March 31, 2018
< 1 year	$	543		$	5,281		$	37,768		$	12,570		$	6,192		$	62,354
1-3 years		690			3,687			22,356			7,981			4,425			39,139
3-5 years		767			2,907			15,236			5,093			4,989			28,992
Over 5 years		4,813			11,955			77,582			36,990			12,395			143,735
Total, gross	$	6,813		$	23,830		$	152,942		$	62,634		$	28,001		$	274,220
Counterparty Netting		(3,339	)		(15,278	)		(123,256	)		(44,638	)		(15,195	)		(201,706	)
Cash and Securities collateral		(3,158	)		(6,512	)		(24,812	)		(12,055	)		(9,077	)		(55,614	)
Total, net	$	316		$	2,040		$	4,874		$	5,941		$	3,729		$	16,900

	Credit Rating1
$ in millions	AAA			AA			A			BBB			Non- investment grade			Total
At December 31, 2017
< 1 year	$	356		$	5,302		$	36,001		$	11,577		$	5,904		$	59,140
1-3 years		558			4,118			23,137			8,887			4,827			41,527
3-5 years		702			3,183			15,577			5,489			4,879			29,830
Over 5 years		5,470			11,667			78,779			37,286			12,079			145,281
Total, gross	$	7,086		$	24,270		$	153,494		$	63,239		$	27,689		$	275,778
Counterparty Netting		(3,018	)		(15,261	)		(125,378	)		(45,421	)		(15,828	)		(204,906	)
Cash and Securities collateral		(3,188	)		(6,785	)		(23,257	)		(12,844	)		(9,123	)		(55,197	)
Total, net	$	880		$	2,224		$	4,859		$	4,974		$	2,738		$	15,675

1. Prior period amounts have been revised to conform to the current presentation.

OTC Derivative Products at Fair Value, Net of Collateral, by Industry

$ in millions	At March 31, 2018		At December 31, 2017
Industry
Utilities	$	4,912	$	4,382
Financials		4,245		3,330
Industrials		1,335		1,124
Regional governments		1,002		1,005
Information technology		869		715
Healthcare		842		882
Energy		656		646
Not-for-profit organizations		633		703
Sovereign governments		502		1,084
Consumer discretionary		463		464
Real estate		378		374
Materials		276		329
Insurance		243		206
Consumer staples		118		161
Other		426		270
Total1	$	16,900	$	15,675

1. For further information on derivative instruments and hedging activities, see Note 4 to the financial statements.

35 March 2018 Form 10-Q

Risk Disclosures

For additional credit exposure information on our credit derivative portfolio, see Note 4 to the financial statements.

Country Risk Exposure

Country risk exposure is the risk that events in, or that affect, a foreign country (any country other than the U.S.) might adversely affect us. We actively manage country risk exposure through a comprehensive risk management framework that combines credit and market fundamentals and allows us to effectively identify, monitor and limit country risk. Country risk exposure before and after hedging is monitored and managed. For a further discussion of our country risk exposure see, “Quantitative and Qualitative Disclosures about Market Risk–Risk Management–Country Risk Exposure” in the 2017 Form 10-K.

Our sovereign exposures consist of financial instruments entered into with sovereign and local governments. Our non-sovereign exposures consist of financial instruments

entered into primarily with corporations and financial institutions. The following table shows our 10 largest non-U.S. country risk net exposures at March 31, 2018. Index credit derivatives are included in the country risk exposure table. Each reference entity within an index is allocated to that reference entity’s country of risk. Index exposures are allocated to the underlying reference entities in proportion to the notional weighting of each reference entity in the index, adjusted for any fair value receivable/payable for that reference entity. Where credit risk crosses multiple jurisdictions, for example, a CDS purchased from an issuer in a specific country that references bonds issued by an entity in a different country, the fair value of the CDS is reflected in the Net Counterparty Exposure column based on the country of the CDS issuer. Further, the notional amount of the CDS adjusted for the fair value of the receivable/payable is reflected in the Net Inventory column based on the country of the underlying reference entity.

March 2018 Form 10-Q 36

Risk Disclosures

Top Ten Country Exposures at March 31, 2018

$ in millions	Net Inventory1			Net Counterparty Exposure2		Loans		Lending Commitments		Exposure before Hedges			Hedges3			Net Exposure
Country
U.K.:
Sovereigns	$	(836	)	$	53	$	—	$	—	$	(783	)	$	(357	)	$	(1,140	)
Non-sovereigns		1,003			10,249		2,533		7,022		20,807			(1,875	)		18,932
Total	$	167		$	10,302	$	2,533	$	7,022	$	20,024		$	(2,232	)	$	17,792
Germany:
Sovereigns	$	1,645		$	460	$	—	$	—	$	2,105		$	(858	)	$	1,247
Non-sovereigns		328			2,200		1,132		3,787		7,447			(1,317	)		6,130
Total	$	1,973		$	2,660	$	1,132	$	3,787	$	9,552		$	(2,175	)	$	7,377
France:
Sovereigns	$	(924	)	$	2	$	—	$	—	$	(922	)	$	(50	)	$	(972	)
Non-sovereigns		9			1,862		294		4,100		6,265			(748	)		5,517
Total	$	(915	)	$	1,864	$	294	$	4,100	$	5,343		$	(798	)	$	4,545
Spain:
Sovereigns	$	(1,648	)	$	—	$	—	$	—	$	(1,648	)	$	—		$	(1,648	)
Non-sovereigns		54			283		3,249		2,748		6,334			(193	)		6,141
Total	$	(1,594	)	$	283	$	3,249	$	2,748	$	4,686		$	(193	)	$	4,493
Japan:
Sovereigns	$	164		$	84	$	—	$	—	$	248		$	(118	)	$	130
Non-sovereigns		476			3,783		—		—		4,259			(118	)		4,141
Total	$	640		$	3,867	$	—	$	—	$	4,507		$	(236	)	$	4,271
Canada:
Sovereigns	$	(326	)	$	48	$	—	$	—	$	(278	)	$	—		$	(278	)
Non-sovereigns		574			2,033		92		1,417		4,116			(278	)		3,838
Total	$	248		$	2,081	$	92	$	1,417	$	3,838		$	(278	)	$	3,560
China:
Sovereigns	$	659		$	188	$	—	$	—	$	847		$	(54	)	$	793
Non-sovereigns		737			228		1,291		434		2,690			(10	)		2,680
Total	$	1,396		$	416	$	1,291	$	434	$	3,537		$	(64	)	$	3,473
Brazil:
Sovereigns	$	2,561		$	—	$	—	$	—	$	2,561		$	(12	)	$	2,549
Non-sovereigns		69			167		26		451		713			(16	)		697
Total	$	2,630		$	167	$	26	$	451	$	3,274		$	(28	)	$	3,246
Netherlands:
Sovereigns	$	(75	)	$	—	$	—	$	—	$	(75	)	$	(20	)	$	(95	)
Non-sovereigns		374			733		1,150		1,153		3,410			(305	)		3,105
Total	$	299		$	733	$	1,150	$	1,153	$	3,335		$	(325	)	$	3,010
India:
Sovereigns	$	1,744		$	—	$	—	$	—	$	1,744		$	—		$	1,744
Non-sovereigns		696			534		—		—		1,230			—			1,230
Total	$	2,440		$	534	$	—	$	—	$	2,974		$	—		$	2,974

1. Net inventory represents exposure to both long and short single-name and index positions (i.e., bonds and equities at fair value and CDS based on a notional amount assuming zero recovery adjusted for any fair value receivable or payable).

2. Net counterparty exposure (i.e., repurchase transactions, securities lending and OTC derivatives) takes into consideration legally enforceable master netting agreements and collateral.

3. Amounts represent CDS hedges (purchased and sold) on net counterparty exposure and lending executed by trading desks responsible for hedging counterparty and lending credit risk exposures for us. Amounts are based on the CDS notional amount assuming zero recovery adjusted for any fair value receivable or payable. For a further description of the contractual terms for purchased credit protection and whether they may limit the effectiveness of our hedges, see “Credit Exposure—Derivatives” herein.

37 March 2018 Form 10-Q

Risk Disclosures

As a market maker, we may transact in CDS positions to facilitate client trading. Exposures related to single-name and index credit derivatives for those countries shown in the previous table were as follows:

Credit Derivatives Included in Net Inventory

$ in millions	At March 31, 2018
Gross purchased protection	$	(78,994	)
Gross written protection		76,135
Net exposure	$	(2,859	)

Net counterparty exposure shown in the Top Ten Country Exposures table above are net of the benefit of collateral received, which is typically composed of cash and government obligations.

Benefit of Collateral Received against Counterparty Credit Exposure

$ in millions	Collateral1	At March 31, 2018
Counterparty credit exposure
U.K.	U.K., U.S. and Japan	$	9,215
Germany	Belgium and Germany		9,193
Other	Japan, France and Spain		14,696

1. Collateral primarily consists of cash and government obligations.

Country Risk Exposures Related to the U.K. At March 31, 2018, our country risk exposures in the U.K. included net exposures of $17,792 million as shown in the Top Ten Country Exposures table, and overnight deposits of $7,047 million. The $18,932 million of exposures to non-sovereigns were diversified across both names and sectors. Of these exposures, $6,168 million were to U.K.-focused counterparties that generate more than one-third of their revenues in the U.K., $5,562 million were to geographically diversified counterparties, and $6,248 million were to exchanges and clearinghouses.

Country Risk Exposures Related to Brazil. At March 31, 2018, our country risk exposures in Brazil included net exposures of $3,246 million as shown in the Top Ten Country Exposures table. Our sovereign net exposures in Brazil were principally in the form of local currency government bonds held onshore to support client activity. The $697 million of exposures to non-sovereigns were diversified across both names and sectors.

Operational Risk

Operational risk refers to the risk of loss, or of damage to our reputation, resulting from inadequate or failed processes or systems, from human factors or from external events (e.g., fraud, theft, legal and compliance risks, cyber attacks or damage to physical assets). We may incur operational risk

across the full scope of our business activities, including revenue-generating activities (e.g., sales and trading) and support and control groups (e.g., information technology and trade processing). For a further discussion about our operational risk, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Operational Risk” in the 2017 Form 10-K.

Model Risk

Model risk refers to the potential for adverse consequences from decisions based on incorrect or misused model outputs. Model risk can lead to financial loss, poor business and strategic decision making, or damage to the Firm’s reputation. The risk inherent in a model is a function of the materiality, complexity and uncertainty around inputs and assumptions. Model risk is generated from the use of models impacting financial statements, regulatory filings, capital adequacy assessments and the formulation of strategy. For a further discussion about our model risk, see “Quantitative and Qualitative Disclosures about Market Risk–Risk Management–Model Risk” in the 2017 Form 10-K.    

Liquidity Risk

Liquidity risk refers to the risk that we will be unable to finance our operations due to a loss of access to the capital markets or difficulty in liquidating our assets. Liquidity risk also encompasses our ability (or perceived ability) to meet our financial obligations without experiencing significant business disruption or reputational damage that may threaten our viability as a going concern. For a further discussion about our liquidity risk, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Liquidity Risk” in the 2017 Form 10-K and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Legal and Compliance Risk

Legal and compliance risk includes the risk of legal or regulatory sanctions, material financial loss, including fines, penalties, judgments, damages and/or settlements, or loss to reputation that we may suffer as a result of failure to comply with laws, regulations, rules, related self-regulatory organization standards and codes of conduct applicable to our business activities. This risk also includes contractual and commercial risk, such as the risk that a counterparty’s performance obligations will be unenforceable. It also includes compliance with AML and terrorist financing rules and regulations. For a further discussion about our legal and compliance risk, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Legal and Compliance Risk” in the 2017 Form 10-K.

March 2018 Form 10-Q 38

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Morgan Stanley:

Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated balance sheet of Morgan Stanley and subsidiaries (the “Firm”) as of March 31, 2018, and the related condensed consolidated income statements, comprehensive income statements, cash flow statements and statements of changes in total equity for the three-month periods ended March 31, 2018 and 2017, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Firm as of December 31, 2017, and the related consolidated income statement, comprehensive income statement, cash flow statement and statement of changes in total equity for the year then ended (not presented herein) included in the Firm’s Annual Report on Form 10-K; and in our report dated February 27, 2018, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2017 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Firm’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Firm in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

New York, New York

May 4, 2018

39 March 2018 Form 10-Q

Financial Statements Consolidated Financial Statements and Notes Consolidated Income Statements (Unaudited)

	Three Months Ended March 31,
in millions, except per share data	2018			2017
Revenues
Investment banking	$	1,634		$	1,545
Trading		3,770			3,235
Investments		126			165
Commissions and fees		1,173			1,033
Asset management		3,192			2,767
Other		207			229
Total non-interest revenues		10,102			8,974
Interest income		2,860			1,965
Interest expense		1,885			1,194
Net interest		975			771
Net revenues		11,077			9,745
Non-interest expenses
Compensation and benefits		4,914			4,466
Occupancy and equipment		336			327
Brokerage, clearing and exchange fees		627			509
Information processing and communications		478			428
Marketing and business development		140			136
Professional services		510			527
Other		652			544
Total non-interest expenses		7,657			6,937
Income from continuing operations before income taxes		3,420			2,808
Provision for income taxes		714			815
Income from continuing operations		2,706			1,993
Income (loss) from discontinued operations, net of income taxes		(2	)		(22	)
Net income	$	2,704		$	1,971
Net income applicable to noncontrolling interests		36			41
Net income applicable to Morgan Stanley	$	2,668		$	1,930
Preferred stock dividends and other		93			90
Earnings applicable to Morgan Stanley common shareholders	$	2,575		$	1,840
Earnings per basic common share
Income from continuing operations	$	1.48		$	1.03
Income (loss) from discontinued operations		—			(0.01	)
Earnings per basic common share	$	1.48		$	1.02
Earnings per diluted common share
Income from continuing operations	$	1.46		$	1.01
Income (loss) from discontinued operations		(0.01	)		(0.01	)
Earnings per diluted common share	$	1.45		$	1.00
Dividends declared per common share	$	0.25		$	0.20
Average common shares outstanding
Basic		1,740			1,801
Diluted		1,771			1,842

March 2018 Form 10-Q 40 See Notes to Consolidated Financial Statements

Consolidated Comprehensive Income Statements (Unaudited)

	Three Months Ended March 31,
$ in millions	2018			2017
Net income	$	2,704		$	1,971
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	$	117		$	150
Change in net unrealized gains (losses) on available-for-sale securities		(410	)		84
Pension, postretirement and other		5			—
Change in net debt valuation adjustment		451			9
Total other comprehensive income (loss)	$	163		$	243
Comprehensive income	$	2,867		$	2,214
Net income applicable to noncontrolling interests		36			41
Other comprehensive income (loss) applicable to noncontrolling interests		72			50
Comprehensive income applicable to Morgan Stanley	$	2,759		$	2,123

See Notes to Consolidated Financial Statements 41 March 2018 Form 10-Q

Consolidated Balance Sheets

$ in millions, except share data	(Unaudited) At March 31, 2018			At December 31, 2017
Assets
Cash and cash equivalents:
Cash and due from banks	$	29,073		$	24,816
Interest bearing deposits with banks		22,980			21,348
Restricted cash		35,291			34,231
Trading assets at fair value ($163,158 and $169,735 were pledged to various parties)		273,044			298,282
Investment securities (includes $56,749 and $55,203 at fair value)		80,641			78,802
Securities purchased under agreements to resell		80,246			84,258
Securities borrowed		135,835			124,010
Customer and other receivables		66,835			56,187
Loans:
Held for investment (net of allowance of $243 and $224)		95,124			92,953
Held for sale		14,011			11,173
Goodwill		6,706			6,597
Intangible assets (net of accumulated amortization of $2,817 and $2,730)		2,427			2,448
Other assets		16,282			16,628
Total assets	$	858,495		$	851,733
Liabilities
Deposits (includes $242 and $204 at fair value)	$	160,424		$	159,436
Trading liabilities at fair value		139,023			131,295
Securities sold under agreements to repurchase (includes $792 and $800 at fair value)		51,575			56,424
Securities loaned		13,556			13,592
Other secured financings (includes $3,423 and $3,863 at fair value)		10,275			11,271
Customer and other payables		194,924			191,510
Other liabilities and accrued expenses		14,265			17,157
Borrowings (includes $47,533 and $46,912 at fair value)		194,964			192,582
Total liabilities		779,006			773,267
Commitments and contingent liabilities (see Note 11)
Equity
Morgan Stanley shareholders’ equity:
Preferred stock		8,520			8,520
Common stock, $0.01 par value:
Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,773,934,393 and 1,788,086,805		20			20
Additional paid-in capital		23,260			23,545
Retained earnings		60,009			57,577
Employee stock trusts		2,907			2,907
Accumulated other comprehensive income (loss)		(3,406	)		(3,060	)
Common stock held in treasury at cost, $0.01 par value (264,959,586 and 250,807,174 shares)		(10,369	)		(9,211	)
Common stock issued to employee stock trusts		(2,907	)		(2,907	)
Total Morgan Stanley shareholders’ equity		78,034			77,391
Noncontrolling interests		1,455			1,075
Total equity		79,489			78,466
Total liabilities and equity	$	858,495		$	851,733

March 2018 Form 10-Q 42 See Notes to Consolidated Financial Statements

Consolidated Statements of Changes in Total Equity (Unaudited)

$ in millions	Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Employee Stock Trusts		Accumulated Other Comprehensive Income (Loss)			Common Stock Held in Treasury at Cost			Common Stock Issued to Employee Stock Trusts			Non- controlling Interests			Total Equity
Balance at December 31, 2017	$	8,520	$	20	$	23,545		$	57,577		$	2,907	$	(3,060	)	$	(9,211	)	$	(2,907	)	$	1,075		$	78,466
Cumulative adjustment for accounting changes1		—		—		—			306			—		(437	)		—			—			—			(131	)
Net income applicable to Morgan Stanley		—		—		—			2,668			—		—			—			—			—			2,668
Net income applicable to noncontrolling interests		—		—		—			—			—		—			—			—			36			36
Dividends		—		—		—			(542	)		—		—			—			—			—			(542	)
Shares issued under employee plans		—		—		(285	)		—			—		—			710			—			—			425
Repurchases of common stock and employee tax withholdings		—		—		—			—			—		—			(1,868	)		—			—			(1,868	)
Net change in Accumulated other comprehensive income (loss)		—		—		—			—			—		91			—			—			72			163
Other net increases		—		—		—			—			—		—			—			—			272			272
Balance at March 31, 2018	$	8,520	$	20	$	23,260		$	60,009		$	2,907	$	(3,406	)	$	(10,369	)	$	(2,907	)	$	1,455		$	79,489
Balance at December 31, 2016	$	7,520	$	20	$	23,271		$	53,679		$	2,851	$	(2,643	)	$	(5,797	)	$	(2,851	)	$	1,127		$	77,177
Cumulative adjustment for accounting changes1		—		—		45			(35	)		—		—			—			—			—			10
Net income applicable to Morgan Stanley		—		—		—			1,930			—		—			—			—			—			1,930
Net income applicable to noncontrolling interests		—		—		—			—			—		—			—			—			41			41
Dividends		—		—		—			(465	)		—		—			—			—			—			(465	)
Shares issued under employee plans		—		—		(430	)		—			186		—			803			(186	)		—			373
Repurchases of common stock and employee tax withholdings		—		—		—			—			—		—			(1,161	)		—			—			(1,161	)
Net change in Accumulated other comprehensive income (loss)		—		—		—			—			—		193			—			—			50			243
Issuance of preferred stock		1,000		—		(6	)		—			—		—			—			—			—			994
Other net decreases		—		—		—			—			—		—			—			—			(58	)		(58	)
Balance at March 31, 2017	$	8,520	$	20	$	22,880		$	55,109		$	3,037	$	(2,450	)	$	(6,155	)	$	(3,037	)	$	1,160		$	79,084

1. The cumulative adjustments relate to the adoption of certain accounting updates during the current and prior year quarters. See Notes 2 and 14 for further information.

See Notes to Consolidated Financial Statements 43 March 2018 Form 10-Q

Consolidated Cash Flow Statements (Unaudited)

	Three Months Ended March 31,
$ in millions	2018			2017
Cash flows from operating activities
Net income	$	2,704		$	1,971
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
(Income) loss from equity method investments		(50	)		(9	)
Stock-based compensation expense		321			269
Depreciation and amortization		390			434
Net gain on sale of available-for-sale securities		—			(2	)
Impairment charges		8			5
Provision for credit losses on lending activities		26			25
Other operating adjustments		5			(74	)
Changes in assets and liabilities:
Trading assets, net of Trading liabilities		33,832			(12,838	)
Securities borrowed		(11,825	)		13,433
Securities loaned		(36	)		3,090
Customer and other receivables and other assets		(13,019	)		(1,687	)
Customer and other payables and other liabilities		1,129			(3,556	)
Securities purchased under agreements to resell		4,012			(2,868	)
Securities sold under agreements to repurchase		(4,849	)		1,897
Net cash provided by (used for) operating activities		12,648			90
Cash flows from investing activities
Proceeds from (payments for):
Other assets—Premises, equipment and software, net		(410	)		(350	)
Changes in loans, net		(3,801	)		(1,105	)
Investment securities:
Purchases		(5,482	)		(6,449	)
Proceeds from sales		810			3,604
Proceeds from paydowns and maturities		2,125			2,071
Other investing activities		(164	)		61
Net cash provided by (used for) investing activities		(6,922	)		(2,168	)
Cash flows from financing activities
Net proceeds from (payments for):
Noncontrolling interests		(5	)		(2	)
Other secured financings		(2,101	)		199
Deposits		988			(3,754	)
Proceeds from:
Derivatives financing activities		—			48
Issuance of preferred stock, net of issuance costs		—			994
Issuance of Borrowings		15,370			18,433
Payments for:
Borrowings		(11,377	)		(11,538	)
Repurchases of common stock and employee tax withholdings		(1,868	)		(1,161	)
Cash dividends		(599	)		(511	)
Other financing activities		(45	)		14
Net cash provided by (used for) financing activities		363			2,722
Effect of exchange rate changes on cash and cash equivalents		860			877
Net increase (decrease) in cash and cash equivalents		6,949			1,521
Cash and cash equivalents, at beginning of period		80,395			77,360
Cash and cash equivalents, at end of period	$	87,344		$	78,881
Cash and cash equivalents:
Cash and due from banks	$	29,073		$	22,081
Interest bearing deposits with banks		22,980			20,773
Restricted cash		35,291			36,027
Cash and cash equivalents, at end of period	$	87,344		$	78,881
Supplemental Disclosure of Cash Flow Information
Cash payments for:
Interest	$	1,407		$	737
Income taxes, net of refunds		250			262

March 2018 Form 10-Q 44 See Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited)

1. Introduction and Basis of Presentation

The Firm

Morgan Stanley is a global financial services firm that maintains significant market positions in each of its business segments—Institutional Securities, Wealth Management and Investment Management. Morgan Stanley, through its subsidiaries and affiliates, provides a wide variety of products and services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals. Unless the context otherwise requires, the terms “Morgan Stanley” or the “Firm” mean Morgan Stanley (the “Parent Company”) together with its consolidated subsidiaries. See the “Glossary of Common Acronyms” for definitions of certain acronyms used throughout this Form 10-Q.

A description of the clients and principal products and services of each of the Firm’s business segments is as follows:

Institutional Securities provides investment banking, sales and trading, lending and other services to corporations, governments, financial institutions, and high to ultra-high net worth clients. Investment banking services consist of capital raising and financial advisory services, including services relating to the underwriting of debt, equity and other securities, as well as advice on mergers and acquisitions, restructurings, real estate and project finance. Sales and trading services include sales, financing, prime brokerage and market-making activities in equity and fixed income products, including foreign exchange and commodities. Lending services include originating and/or purchasing corporate loans, commercial and residential mortgage lending, asset-backed lending, financing extended to equities and commodities customers, and loans to municipalities. Other activities include investments and research.

Wealth Management provides a comprehensive array of financial services and solutions to individual investors and small to medium-sized businesses and institutions covering brokerage and investment advisory services, financial and wealth planning services, annuity and insurance products, credit and other lending products, banking and retirement plan services.

Investment Management provides a broad range of investment strategies and products that span geographies, asset classes, and public and private markets to a diverse group of clients across institutional and intermediary channels. Strategies and products include equity, fixed

income, liquidity and alternative/other products. Institutional clients include defined benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, third-party fund sponsors and corporations. Individual clients are serviced through intermediaries, including affiliated and non-affiliated distributors.

Basis of Financial Information

The unaudited consolidated financial statements (“financial statements”) are prepared in accordance with U.S. GAAP, which requires the Firm to make estimates and assumptions regarding the valuations of certain financial instruments, the valuation of goodwill and intangible assets, compensation, deferred tax assets, the outcome of legal and tax matters, allowance for credit losses and other matters that affect its financial statements and related disclosures. The Firm believes that the estimates utilized in the preparation of its financial statements are prudent and reasonable. Actual results could differ materially from these estimates. Intercompany balances and transactions have been eliminated. Certain reclassifications have been made to prior periods to conform to the current presentation.

The accompanying financial statements should be read in conjunction with the Firm’s financial statements and notes thereto included in the 2017 Form 10-K. Certain footnote disclosures included in the 2017 Form 10-K have been condensed or omitted from these financial statements as they are not required for interim reporting under U.S. GAAP. The financial statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for the fair presentation of the results for the interim period. The results of operations for interim periods are not necessarily indicative of results for the entire year.

Consolidation

The financial statements include the accounts of the Firm, its wholly owned subsidiaries and other entities in which the Firm has a controlling financial interest, including certain VIEs (see Note 12). For consolidated subsidiaries that are less than wholly owned, the third-party holdings of equity interests are referred to as noncontrolling interests. The net income attributable to noncontrolling interests for such subsidiaries is presented as Net income applicable to noncontrolling interests in the consolidated income statements (“income statements”). The portion of shareholders’ equity that is attributable to noncontrolling interests for such subsidiaries is presented as noncontrolling interests, a component of total equity, in the consolidated balance sheets (“balance sheets”).

45 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

For a discussion of the Firm’s involvement with VIEs and its significant regulated U.S. and international subsidiaries, see Notes 1 and 2 to the financial statements in the 2017 Form  10-K.

2. Significant Accounting Policies

For a detailed discussion about the Firm’s significant accounting policies, see Note 2 to the financial statements in the 2017 Form 10-K.

During the three months ended March 31, 2018 (“current quarter”), there were no significant revisions to the Firm’s significant accounting policies, other than the following and the accounting updates adopted.

Carried Interest

The Firm is entitled to receive performance-based fees (also referred to as incentive fees, and includes carried interest) when the return on assets under management exceeds certain benchmark returns or other performance targets. Beginning January 1, 2018, when the Firm earns carried interest from funds as specified performance thresholds are met, that carried interest and any related general or limited partner interest is accounted for under the equity method of accounting and measured based on the Firm’s claim on the NAV of the fund at the reporting date taking into account the distribution terms applicable to the interest held. Performance-based fees in the form of carried interest considered equity method investments are therefore outside the scope of the policies for revenue from contracts with customers discussed below. See Note 11 for information regarding general partner guarantees, which include potential obligations to return performance fee distributions previously received.

Accounting Updates Adopted

The Firm adopted the following accounting updates in the current quarter. Prior year quarter results are presented under previous policies. See Note 14 for a summary of the Retained earnings impacts of these and other minor adoptions effective this quarter.

Revenue from Contracts with Customers

On January 1, 2018, we adopted Revenue from Contracts with Customers using the modified retrospective method, which resulted in a net decrease to Retained earnings of $32 million, net of tax. Prior period amounts were not restated. See Note 20 for new disclosures related to the adoption of this standard.

Our revised accounting policy in accordance with this adoption is effective January 1, 2018, and is discussed below.

Revenue Recognition

Revenues are recognized when the promised goods or services are delivered to our customers, in an amount that is based on the consideration the Firm expects to receive in exchange for those goods or services when such amounts are not probable of significant reversal.

• Investment Banking

Revenue from investment banking activities consists of revenues earned from underwriting primarily equity and fixed income securities and advisory fees for mergers, acquisitions, restructuring and advisory assignments.

Underwriting revenues are generally recognized on trade date if there is no uncertainty or contingency related to the amount to be paid. Underwriting costs are deferred and recognized in the relevant non-compensation expense line items when the related underwriting revenues are recorded.

Advisory fees are recognized as advice is provided to the client, based on the estimated progress of work and when the revenue is not probable of a significant reversal. Advisory costs are recognized as incurred in the relevant non-compensation expense line items, including when reimbursed.

• Commissions and Fees

Commission and fee revenues result from transaction-based arrangements in which the client is charged a fee for the execution of transactions. Such revenues primarily arise from transactions in equity securities; services related to sales and trading activities; and sales of mutual funds, alternative funds, futures, insurance products and options. Commission and fee revenues are recognized on trade date when the performance obligation is satisfied.

• Asset Management Revenues

Asset management, distribution and administration fees are generally based on related asset levels being managed, such as the AUM of a customer’s account, or the net asset value of a fund. These fees are generally recognized when services are performed and the fees become known. Management fees are reduced by estimated fee waivers and expense caps, if any, provided to the customer.

March 2018 Form 10-Q 46

Notes to Consolidated Financial Statements (Unaudited)

Performance-based fees not in the form of carried interest are recorded when the annual performance target is met and the revenue is not probable of a significant reversal. Performance-based fees in the form of carried interest are considered equity method investments and are therefore outside the scope of these policies for revenue from contracts with customers.

Sales commissions paid by the Firm in connection with the sale of certain classes of shares of its open-end mutual fund products are accounted for as deferred commission assets and amortized to expense over the expected life of the contract. The Firm periodically tests deferred commission assets for recoverability based on cash flows expected to be received in future periods. Other asset management and distribution costs are recognized as incurred in the relevant non-compensation expense line items.

• Other Items

Revenue from commodities-related contracts is recognized as the promised goods or services are delivered to the customer.

Receivables from contracts with customers are recognized in Customer and other receivables in the balance sheets when the underlying performance obligations have been satisfied and the Firm has the right per the contract to bill the customer. Contract assets are recognized in Other assets when the Firm has satisfied its performance obligations, but customer payment is conditional. Contract liabilities are recognized in Other liabilities when the Firm has collected payment from a customer based on the terms of the contract, but the underlying performance obligations are not yet satisfied.

For contracts with a term less than one year, incremental costs to obtain the contract are expensed as incurred. Revenues are not discounted when payment is expected within one year.

The Firm presents, net within revenues, all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Firm from a customer.

Derivatives and Hedging–Targeted Improvements to Accounting for Hedging Activities

This accounting update aims to better align the hedge accounting requirements with an entity’s risk management strategies and improve the financial reporting of hedging relationships. It also results in simplification of the application of hedge accounting related to the assessment of hedge effectiveness.

The Firm early adopted this accounting update in the first quarter of 2018. Upon adoption, the Firm recorded a cumulative catch-up adjustment, decreasing Retained earnings by $99 million, net of tax. This adjustment represents the cumulative effect of applying the new rules from the inception of certain fair value hedges of the interest rate risk of our borrowings, in particular the provision allowing only the benchmark rate component of coupon cash flows to be hedged.

Effective January 1, 2018, in accordance with this adoption, the Firm has updated its accounting policies to permit the hedged item in a fair value hedge of interest rate risk to be defined as including only the benchmark rate component of contractual coupon cash flows, and to allow for hedging part of the contractual term of the hedged instrument. The accounting policy also requires the entire gain or loss from revaluing hedges of net investments in foreign operations at the spot rate to be reported within AOCI.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

This accounting update, which the Firm elected to early adopt as of January 1, 2018, allows companies to reclassify from AOCI to Retained earnings the stranded tax effects associated with enactment of the Tax Act on December 22, 2017. These stranded tax effects resulted from the requirement to reflect the total amount of the remeasurement of and other adjustments to deferred tax assets and liabilities in 2017 income from continuing operations, regardless of whether the deferred taxes were originally recorded in AOCI. Accordingly, as of January 1, 2018, the Firm recorded a net increase to Retained earnings as a result of the reclassification of $443 million of such stranded tax effects previously recorded in AOCI, which were primarily the result of the remeasurement of deferred tax assets and liabilities associated with the change in tax rates.

Aside from the above treatment related to the Tax Act, the Firm releases stranded tax effects from AOCI into earnings once the related category of instruments or transactions giving rise to these effects no longer exists. For further detail on the tax effects reclassified, refer to Note 14 to the financial statements.

47 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

3. Fair Values

Fair Value Measurement

Assets and Liabilities Measured at Fair Value on a Recurring Basis

	At March 31, 2018
$ in millions	Level 1			Level 2			Level 3			Netting1			Total
Assets at fair value
Trading assets:
U.S. Treasury and agency securities	$	22,675		$	23,430		$	—		$	—		$	46,105
Other sovereign government obligations		18,185			9,371			7			—			27,563
State and municipal securities		—			3,235			2			—			3,237
MABS		—			1,799			342			—			2,141
Loans and lending commitments2		—			4,865			8,128			—			12,993
Corporate and other debt		—			21,392			814			—			22,206
Corporate equities3		120,280			494			233			—			121,007
Derivative and other contracts:
Interest rate		989			176,030			1,250			—			178,269
Credit		—			6,971			362			—			7,333
Foreign exchange		45			53,504			29			—			53,578
Equity		1,165			44,506			3,871			—			49,542
Commodity and other		383			6,908			4,576			—			11,867
Netting1		(1,665	)		(216,759	)		(1,581	)		(47,436	)		(267,441	)
Total derivative and other contracts		917			71,160			8,507			(47,436	)		33,148
Investments4		482			372			1,012			—			1,866
Physical commodities		—			205			—			—			205
Total trading assets4		162,539			136,323			19,045			(47,436	)		270,471
Investment securities— AFS		29,979			26,770			—			—			56,749
Intangible assets		—			3			—			—			3
Total assets at fair value	$	192,518		$	163,096		$	19,045		$	(47,436	)	$	327,223

	At March 31, 2018
$ in millions	Level 1			Level 2			Level 3			Netting1			Total
Liabilities at fair value
Deposits	$	—		$	198		$	44		$	—		$	242
Trading liabilities:
U.S. Treasury and agency securities		20,182			32			—			—			20,214
Other sovereign government obligations		24,281			3,890			3			—			28,174
Corporate and other debt		—			7,886			4			—			7,890
Corporate equities3		56,667			60			32			—			56,759
Derivative and other contracts:
Interest rate		1,043			159,538			580			—			161,161
Credit		—			7,456			392			—			7,848
Foreign exchange		31			53,408			62			—			53,501
Equity		1,054			46,616			2,856			—			50,526
Commodity and other		543			5,680			2,916			—			9,139
Netting1		(1,665	)		(216,759	)		(1,581	)		(36,184	)		(256,189	)
Total derivative and other contracts		1,006			55,939			5,225			(36,184	)		25,986
Total trading liabilities		102,136			67,807			5,264			(36,184	)		139,023
Securities sold under agreements to repurchase		—			792			—			—			792
Other secured financings		—			3,203			220			—			3,423
Borrowings		—			43,907			3,626			—			47,533
Total liabilities at fair value	$	102,136		$	115,907		$	9,154		$	(36,184	)	$	191,013

March 2018 Form 10-Q 48

Notes to Consolidated Financial Statements (Unaudited)

	At December 31, 2017
$ in millions	Level 1			Level 2			Level 3			Netting1			Total
Assets at fair value
Trading assets:
U.S. Treasury and agency securities	$	22,077		$	26,888		$	—		$	—		$	48,965
Other sovereign government obligations		20,234			7,825			1			—			28,060
State and municipal securities		—			3,592			8			—			3,600
MABS		—			2,364			423			—			2,787
Loans and lending commitments2		—			4,791			5,945			—			10,736
Corporate and other debt		—			16,837			701			—			17,538
Corporate equities3		149,697			492			166			—			150,355
Derivative and other contracts:
Interest rate		472			178,704			1,763			—			180,939
Credit		—			7,602			420			—			8,022
Foreign exchange		58			53,724			15			—			53,797
Equity		1,101			40,359			3,530			—			44,990
Commodity and other		1,126			5,390			4,147			—			10,663
Netting1		(2,088	)		(216,764	)		(1,575	)		(47,171	)		(267,598	)
Total derivative and other contracts		669			69,015			8,300			(47,171	)		30,813
Investments4		297			523			1,020			—			1,840
Physical commodities		—			1,024			—			—			1,024
Total trading assets4		192,974			133,351			16,564			(47,171	)		295,718
Investment securities— AFS		27,522			27,681			—			—			55,203
Intangible assets		—			3			—			—			3
Total assets at fair value	$	220,496		$	161,035		$	16,564		$	(47,171	)	$	350,924

	At December 31, 2017
$ in millions	Level 1			Level 2			Level 3			Netting1			Total
Liabilities at fair value
Deposits	$	—		$	157		$	47		$	—		$	204
Trading liabilities:
U.S. Treasury and agency securities		17,802			24			—			—			17,826
Other sovereign government obligations		24,857			2,016			—			—			26,873
Corporate and other debt		—			7,141			3			—			7,144
Corporate equities3		52,653			82			22			—			52,757
Derivative and other contracts:
Interest rate		364			162,239			545			—			163,148
Credit		—			8,166			379			—			8,545
Foreign exchange		23			55,118			127			—			55,268
Equity		1,001			44,666			2,322			—			47,989
Commodity and other		1,032			5,156			2,701			—			8,889
Netting1		(2,088	)		(216,764	)		(1,575	)		(36,717	)		(257,144	)
Total derivative and other contracts		332			58,581			4,499			(36,717	)		26,695
Total trading liabilities		95,644			67,844			4,524			(36,717	)		131,295
Securities sold under agreements to repurchase		—			650			150			—			800
Other secured financings		—			3,624			239			—			3,863
Borrowings		—			43,928			2,984			—			46,912
Total liabilities at fair value	$	95,644		$	116,203		$	7,944		$	(36,717	)	$	183,074

MABS—Mortgage- and asset-backed securities

1. For positions with the same counterparty that cross over the levels of the fair value hierarchy, both counterparty netting and cash collateral netting are included in the column titled “Netting.” Positions classified within the same level that are with the same counterparty are netted within that level. For further information on derivative instruments and hedging activities, see Note 4.

2. For a further breakdown by type, see the following Loans and Lending Commitments at Fair Value table.

3. For trading purposes, the Firm holds or sells short equity securities issued by entities in diverse industries and of varying sizes.

4. Amounts exclude certain investments that are measured based on NAV per share, which are not classified in the fair value hierarchy. For additional disclosure about such investments, see “Measured Based on Net Asset Value” herein.

Loans and Lending Commitments at Fair Value

$ in millions	At March 31, 2018		At December 31, 2017
Corporate	$	9,346	$	8,358
Residential real estate		706		799
Wholesale real estate		2,941		1,579
Total	$	12,993	$	10,736

49 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

Unsettled Fair Value of Futures Contracts¹

$ in millions	At March 31, 2018		At December 31, 2017
Customer and other receivables, net	$	714	$	831

1. These contracts are primarily Level 1, actively traded, valued based on quoted prices from the exchange and are excluded from the previous recurring fair value tables.

For a description of the valuation techniques applied to the Firm’s major categories of assets and liabilities measured at fair value on a recurring basis, see Note 3 to the financial statements in the 2017 Form 10-K. During the current quarter, there were no significant revisions made to the Firm’s valuation techniques.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present additional information about Level 3 assets and liabilities measured at fair value on a

recurring basis. Level 3 instruments may be hedged with instruments classified in Level 1 and Level 2. As a result, the realized and unrealized gains (losses) for assets and liabilities within the Level 3 category presented in the following tables do not reflect the related realized and unrealized gains (losses) on hedging instruments that have been classified by the Firm within the Level 1 and/or Level 2 categories.

Additionally, the unrealized gains (losses) during the period for assets and liabilities within the Level 3 category presented in the following tables herein may include changes in fair value during the period that were attributable to both observable and unobservable inputs. Total realized and unrealized gains (losses) are primarily included in Trading revenues in the income statements.

Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Current Quarter

$ in millions	Beginning Balance at December 31, 2017			Realized and Unrealized Gains (Losses)			Purchases1			Sales and Issuances2			Settlements1			Net Transfers			Ending Balance at March 31, 2018			Unrealized Gains (Losses)
Assets at fair value
Trading assets:
Other sovereign government obligations	$	1		$	—		$	7		$	—		$	—		$	(1	)	$	7		$	—
State and municipal securities		8			—			1			(7	)		—			—			2			—
MABS		423			77			64			(238	)		(16	)		32			342			2
Loans and lending commitments		5,945			28			3,740			(283	)		(1,218	)		(84	)		8,128			(9	)
Corporate and other debt		701			1			350			(243	)		—			5			814			(1	)
Corporate equities		166			—			166			(132	)		—			33			233			(9	)
Net derivative and other contracts3:
Interest rate		1,218			52			32			(41	)		(81	)		(510	)		670			75
Credit		41			(107	)		—			—			38			(2	)		(30	)		(109	)
Foreign exchange		(112	)		57			—			(31	)		33			20			(33	)		(9	)
Equity		1,208			356			142			(799	)		159			(51	)		1,015			315
Commodity and other		1,446			217			13			(6	)		(57	)		47			1,660			149
Total net derivative and other contracts		3,801			575			187			(877	)		92			(496	)		3,282			421
Investments		1,020			44			21			(78	)		—			5			1,012			22
Liabilities at fair value
Deposits	$	47		$	1		$	—		$	9		$	(1	)	$	(10	)	$	44		$	1
Trading liabilities:
Other sovereign government obligations		—			—			—			3			—			—			3			—
Corporate and other debt		3			—			(2	)		1			—			2			4			—
Corporate equities		22			4			(5	)		11			—			8			32			4
Securities sold under agreements to repurchase		150			—			—			—			—			(150	)		—			—
Other secured financings		239			13			—			4			(10	)		—			220			13
Borrowings		2,984			102			—			640			(83	)		187			3,626			99

1. Loan originations and consolidations of VIEs are included in Purchases and deconsolidations of VIEs are included in Settlements.

2. Amounts related to entering into Net derivative and other contracts, Deposits, Other secured financings and Borrowings primarily represent issuances. Amounts for other line items primarily represent sales.

3. Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts. Amounts are presented before counterparty netting.

March 2018 Form 10-Q 50

Notes to Consolidated Financial Statements (Unaudited)

Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Prior Year Quarter

$ in millions	Beginning Balance at December 31, 2016			Realized and Unrealized Gains (Losses)			Purchases1			Sales and Issuances2			Settlements1			Net Transfers			Ending Balance at March 31, 2017			Unrealized Gains (Losses)
Assets at fair value
Trading assets:
U.S. Treasury and agency securities	$	74		$	—		$	42		$	(241	)	$	—		$	167		$	42		$	—
Other sovereign government obligations		6			—			61			(2	)		—			—			65			—
State and municipal securities		250			—			2			(2	)		—			(195	)		55			—
MABS		217			7			39			(56	)		(11	)		20			216			(1	)
Loans and lending commitments		5,122			53			757			(555	)		(985	)		87			4,479			39
Corporate and other debt		475			21			262			(142	)		(1	)		102			717			3
Corporate equities		446			(1	)		41			(105	)		—			(71	)		310			3
Net derivative and other contracts3:
Interest rate		420			(114	)		46			(24	)		16			(46	)		298			(127	)
Credit		(373	)		(25	)		6			(5	)		41			5			(351	)		(33	)
Foreign exchange		(43	)		(36	)		1			—			11			(4	)		(71	)		(20	)
Equity		184			(144	)		83			(121	)		231			(16	)		217			(81	)
Commodity and other		1,600			127			6			(28	)		(69	)		(133	)		1,503			34
Total net derivative and other contracts		1,788			(192	)		142			(178	)		230			(194	)		1,596			(227	)
Investments		958			8			62			(3	)		(66	)		2			961			8
Liabilities at fair value
Deposits	$	42		$	(1	)	$	—		$	13		$	—		$	—		$	56		$	(1	)
Trading liabilities:
Corporate and other debt		36			(1	)		(119	)		101			—			17			36			(1	)
Corporate equities		35			12			(68	)		26			—			21			2			—
Securities sold under agreements to repurchase		149			1			—			—			—			—			148			1
Other secured financings		434			(19	)		—			13			(220	)		(43	)		203			(12	)
Borrowings		2,014			(59	)		—			270			(165	)		(86	)		2,092			(58	)

1. Loan originations and consolidations of VIEs are included in Purchases and deconsolidations of VIEs are included in Settlements.

2. Amounts related to entering into Net derivative and other contracts, Deposits, Other secured financings and Borrowings primarily represent issuances. Amounts for other line items primarily represent sales.

3. Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts. Amounts are presented before counterparty netting.

Significant Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements

The following disclosures provide information on the valuation techniques, significant unobservable inputs, and their ranges and averages for each major category of assets and liabilities measured at fair value on a recurring and nonrecurring basis with a significant Level 3 balance. The level of aggregation and breadth of products cause the range of inputs to be wide and not evenly distributed across the inventory. Further, the range of unobservable inputs may differ across firms in the financial services industry because of diversity in the types of products included in each firm’s inventory. For qualitative information on the sensitivity of the fair value measurements to changes in the significant unobservable inputs, see Note 3 to the financial statements in the 2017 Form 10-K. There are no predictable relationships between multiple significant unobservable inputs attributable to a given valuation technique. A single amount is disclosed when there is no significant difference between the minimum, maximum and average (weighted average or simple average/median).

51 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

Valuation Techniques and Sensitivity of Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements
	Predominant Valuation Techniques/     Significant Unobservable Inputs	Range (Weighted Average or Simple Average/Median)1
$ in millions, except inputs		At March 31, 2018	At December 31, 2017
Recurring Fair Value Measurement
Assets at fair value
MABS ($342 and $423)
Comparable pricing:	Comparable bond price	0 to 95 points (41 points)	0 to 95 points (26 points)
Loans and lending commitments ($8,128 and $5,945)
Margin loan model:	Discount rate	0% to 3% (1%)	0% to 3% (1%)
	Volatility skew	9% to 67% (28%)	7% to 41% (22%)
Comparable pricing:	Comparable loan price	55 to 101 points (97 points)	55 to 102 points (95 points)
Corporate and other debt ($814 and $701)
Comparable pricing:	Comparable bond price	3 to 100 points (70 points)	3 to 134 points (59 points)
Discounted cash flow:	Recovery rate	16%	6% to 36% (27%)
	Discount rate	7% to 20% (15%)	7% to 20% (14%)
Option model:	At the money volatility	15% to 52% (33%)	17% to 52% (52%)
Corporate equities ($233 and $166)
Comparable pricing:	Comparable equity price	100%	100%
Net derivative and other contracts2:
Interest rate ($670 and $1,218)
Option model:	Interest rate volatility skew	29% to 106% (40% / 43%)	31% to 97% (41% / 47%)
	Inflation volatility	23% to 61% (44% / 41%)	23% to 63% (44% / 41%)
	Interest rate curve	1% to 2% (2% / 2%)	2%
Credit ($(30) and $41)
Comparable pricing:	Cash synthetic basis	10 to 11 points (11 points)	12 to 13 points (12 points)
	Comparable bond price	0 to 75 points (25 points)	0 to 75 points (25 points)
Correlation model:	Credit correlation	39% to 67% (50%)	38% to 100% (48%)
Foreign exchange3 ($(33) and $(112))
Option model:	Interest rate - Foreign exchange correlation	55% to 57% (56% / 56%)	54% to 57% (56% / 56%)
	Interest rate volatility skew	29% to 106% (40% / 43%)	31% to 97% (41% / 47%)
	Contingency probability	90% to 95% (93% / 93%)	95% to 100% (96% / 95%)
Equity3 ($1,015 and $1,208)
Option model:	At the money volatility	14% to 55% (35%)	7% to 54% (32%)
	Volatility skew	-3% to 0% (-1%)	-5% to 0% (-1%)
	Equity - Equity correlation	5% to 99% (76%)	5% to 99% (76%)
	Equity - Foreign exchange correlation	-62% to 55% (-42%)	-55% to 40% (36%)
	Equity - Interest rate correlation	-7% to 48% (18% / 14%)	-7% to 49% (18% / 20%)
Commodity and other ($1,660 and $1,446)
Option model:	Forward power price	$2 to $212 ($30) per MWh	$4 to $102 ($31) per MWh
	Commodity volatility	5% to 167% (14%)	7% to 205% (17%)
	Cross-commodity correlation	5% to 99% (92%)	5% to 99% (92%)
Investments ($1,012 and $1,020)
Discounted cash flow:	WACC	9% to 15% (9%)	8% to 15% (9%)
	Exit multiple	8 to 10 times (10 times)	8 to 11 times (10 times)
Market approach:	EBITDA multiple	6 to 24 times (11 times)	6 to 25 times (11 times)
Comparable pricing:	Comparable equity price	35% to 100% (93%)	45% to 100% (92%)

March 2018 Form 10-Q 52

Notes to Consolidated Financial Statements (Unaudited)

	Predominant Valuation Techniques/     Significant Unobservable Inputs	Range (Weighted Average or Simple Average/Median)1
$ in millions, except inputs		At March 31, 2018	At December 31, 2017
Liabilities at Fair Value
Securities sold under agreements to repurchase ($— and $150)
Discounted cash flow:	Funding spread	N/A	107 to 126 bps (120 bps)
Other secured financings ($220 and $239)
Discounted cash flow:	Funding spread	54 to 93 bps (74 bps)	39 to 76 bps (57 bps)
Option model:	Volatility skew	-1%	-1%
	At the money volatility	10% to 40% (26%)	10% to 40% (26%)
Borrowings ($3,626 and $2,984)
Option model:	At the money volatility	5% to 33% (23%)	5% to 35% (22%)
	Volatility skew	-2% to 0% (0%)	-2% to 0% (0%)
	Equity - Equity correlation	45% to 95% (81%)	39% to 95% (86%)
	Equity - Foreign exchange correlation	-43% to 30% (-26%)	-55% to 10% (-18%)
Nonrecurring Fair Value Measurement
Assets at fair value
Loans ($1,057 and $924)
Corporate loan model:	Credit spread	94 to 432 bps (206 bps)	93 to 563 bps (239 bps)
Expected recovery:	Asset coverage	95% to 99% (95%)	95% to 99% (95%)

Points—Percentage of par

1. Amounts represent weighted averages except where simple averages and the median of the inputs are provided when more relevant.

2. CVA and FVA are included in the balance but excluded from the Valuation Technique(s) and Significant Unobservable Inputs. CVA is a Level 3 input when the underlying counterparty credit curve is unobservable. FVA is a Level 3 input in its entirety given the lack of observability of funding spreads in the principal market.

3. Includes derivative contracts with multiple risks (i.e., hybrid products).

For a description of the Firm’s significant unobservable inputs and related sensitivity, see Note 3 to the financial statements in the 2017 Form 10-K. During the current quarter, there were no significant revisions made to the Firm’s significant unobservable inputs.

Measured Based on Net Asset Value

For a description of the Firm’s investments in private equity funds, real estate funds and hedge funds, which are measured based on NAV, see Note 3 to the financial statements in the 2017 Form 10-K.

	At March 31, 2018				At December 31, 2017
$ in millions	Carrying Value		Commitment		Carrying Value		Commitment
Private equity	$	1,678	$	304	$	1,674	$	308
Real estate		796		181		800		183
Hedge1		99		4		90		4
Total	$	2,573	$	489	$	2,564	$	495

1. Investments in hedge funds may be subject to initial period lock-up or gate provisions, which restrict an investor from withdrawing from the fund during a certain initial period or restrict the redemption amount on any redemption date, respectively.

Amounts in the previous table represent the Firm’s carrying value of general and limited partnership interests in fund investments, as well as any related performance fees in the form of carried interest. The carrying amounts are measured

based on the NAV of the fund taking into account the distribution terms applicable to the interest held. This same measurement applies whether investments are accounted for under the equity method or fair value.

See Note 11 for information regarding general partner guarantees, which include potential obligations to return performance fee distributions previously received. See Note 19 for information regarding related performance fees at risk of reversal, including performance fees in the form of carried interest.

Nonredeemable Funds by Contractual Maturity

	Carrying Value at March 31, 2018
$ in millions	Private Equity		Real Estate
Less than 5 years	$	430	$	60
5-10 years		1,054		527
Over 10 years		194		209
Total	$	1,678	$	796

Fair Value Option

The Firm elected the fair value option for certain eligible instruments that are risk managed on a fair value basis to mitigate income statement volatility caused by measurement basis differences between the elected instruments and their associated risk management transactions or to eliminate complexities of applying certain accounting models.

53 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

Earnings Impact of Instruments under the Fair Value Option

$ in millions	Trading Revenues			Interest Income (Expense)			Net Revenues
Three Months Ended March 31, 2018
Borrowings	$	26		$	(102	)	$	(76	)
Three Months Ended March 31, 2017
Borrowings	$	(1,625	)	$	(119	)	$	(1,744	)

Gains (losses) are mainly attributable to changes in foreign currency rates or interest rates or movements in the reference price or index.

The amounts in the previous table are included within Net revenues and do not reflect any gains or losses on related hedging instruments.

Gains (Losses) Due to Changes in Instrument-Specific Credit Risk

	Three Months Ended March 31,
	2018					2017
$ in millions	Trading Revenues			OCI		Trading Revenues			OCI
Borrowings	$	(15	)	$	593	$	(4	)	$	14
Securities sold under agreements to repurchase		—			2		—			(3	)
Loans and other debt1		81			—		(3	)		—
Lending commitments2		2			—		—			—

$ in millions	At March 31, 2018			At December 31, 2017
Cumulative pre-tax DVA gain (loss) recognized in AOCI	$	(1,236	)	$	(1,831	)

1. Loans and other debt instrument-specific credit gains (losses) were determined by excluding the non-credit components of gains and losses.

2. Gains (losses) on lending commitments were generally determined based on the difference between estimated expected client yields and contractual yields at each respective period-end.

Borrowings Measured at Fair Value on a Recurring Basis

$ in millions	At March 31, 2018		At December 31, 2017
Business Unit Responsible for Risk Management
Equity	$	25,181	$	25,903
Interest rates		19,744		19,230
Foreign exchange		622		666
Credit		855		815
Commodities		1,131		298
Total	$	47,533	$	46,912

Excess of Contractual Principal Amount Over Fair Value

$ in millions	At March 31, 2018		At December 31, 2017
Loans and other debt1	$	14,843	$	13,481
Loans 90 or more days past due and/or on nonaccrual status1		11,834		11,253
Borrowings2		897		71

1. The majority of the difference between principal and fair value amounts for loans and other debt relates to distressed debt positions purchased at amounts well below par.

2. Borrowings do not include structured notes where the repayment of the initial principal amount fluctuates based on changes in a reference price or index.

Fair Value Loans on Nonaccrual Status

$ in millions	At March 31, 2018		At December 31, 2017
Nonaccrual loans	$	1,315	$	1,240
Nonaccrual loans 90 or more days past due	$	654	$	779

The previous tables exclude non-recourse debt from consolidated VIEs, liabilities related to failed sales of financial assets, pledged commodities and other liabilities that have specified assets attributable to them.

Measured at Fair Value on a Nonrecurring Basis

Carrying and Fair Values

	At March 31, 2018
	Fair Value
$ in millions	Level 2		Level 31		Total
Assets
Loans	$	1,352	$	1,057	$	2,409
Other assets—Premises, equipment and software		—		—		—
Total	$	1,352	$	1,057	$	2,409
Liabilities
Other liabilities and accrued expenses—Lending commitments	$	173	$	40	$	213
Total	$	173	$	40	$	213

March 2018 Form 10-Q 54

Notes to Consolidated Financial Statements (Unaudited)

	At December 31, 2017
	Fair Value
$ in millions	Level 2		Level 31		Total
Assets
Loans	$	1,394	$	924	$	2,318
Other assets—Other investments		—		144		144
Total	$	1,394	$	1,068	$	2,462
Liabilities
Other liabilities and accrued expenses—Lending commitments	$	158	$	38	$	196
Total	$	158	$	38	$	196

1. For significant Level 3 balances, refer to “Significant Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements” section herein for details of the significant unobservable inputs used for nonrecurring fair value measurement.

Gains (Losses) from Fair Value Remeasurements¹

	Three Months Ended March 31,
$ in millions	2018			2017
Assets
Loans2	$	8		$	32
Other assets—Premises, equipment and software3		(8	)		(5	)
Total	$	—		$	27
Liabilities
Other liabilities and accrued expenses—Lending commitments2	$	6		$	11
Total	$	6		$	11

1. Gains and losses for Loans are classified in Other revenues. For other items, gains and losses are recorded in Other revenues if the item is held for sale, otherwise in Other expenses.

2. Nonrecurring changes in the fair value of loans and lending commitments were calculated as follows: for the held for investment category, based on the value of the underlying collateral; and for the held for sale category, based on recently executed transactions, market price quotations, valuation models that incorporate market observable inputs where possible, such as comparable loan or debt prices and CDS spread levels adjusted for any basis difference between cash and derivative instruments, or default recovery analysis where such transactions and quotations are unobservable.

3. Losses related to Other assets—Premises, equipment and software were determined using techniques that included a default recovery analysis and recently executed transactions.

Financial Instruments Not Measured at Fair Value

	At March 31, 2018
	Carrying		Fair Value
$ in millions	Value		Level 1		Level 2		Level 3		Total
Financial Assets
Cash and cash equivalents:
Cash and due from banks	$	29,073	$	29,073	$	—	$	—	$	29,073
Interest bearing deposits with banks		22,980		22,980		—		—		22,980
Restricted cash		35,291		35,291		—		—		35,291
Investment securities—HTM		23,892		11,327		11,270		322		22,919
Securities purchased under agreements to resell		80,246		—		80,175		16		80,191
Securities borrowed		135,835		—		135,781		—		135,781
Customer and other receivables1		61,017		—		57,405		3,433		60,838
Loans2		109,135		—		25,687		83,146		108,833
Other assets		438		—		438		—		438
Financial Liabilities
Deposits	$	160,182	$	—	$	160,172	$	—	$	160,172
Securities sold under agreements to repurchase		50,783		—		50,763		1		50,764
Securities loaned		13,556		—		13,623		—		13,623
Other secured financings		6,852		—		6,265		607		6,872
Customer and other payables1		191,332		—		191,332		—		191,332
Borrowings		147,431		—		151,664		27		151,691

	At December 31, 2017
	Carrying		Fair Value
$ in millions	Value		Level 1		Level 2		Level 3		Total
Financial Assets
Cash and cash equivalents:
Cash and due from banks	$	24,816	$	24,816	$	—	$	—	$	24,816
Interest bearing deposits with banks		21,348		21,348		—		—		21,348
Restricted cash		34,231		34,231		—		—		34,231
Investment securities—HTM		23,599		11,119		11,673		289		23,081
Securities purchased under agreements to resell		84,258		—		78,239		5,978		84,217
Securities borrowed		124,010		—		124,018		1		124,019
Customer and other receivables1		51,269		—		47,159		3,984		51,143
Loans2		104,126		—		21,290		82,928		104,218
Other assets		433		—		433		—		433
Financial Liabilities
Deposits	$	159,232	$	—	$	159,232	$	—	$	159,232
Securities sold under agreements to repurchase		55,624		—		51,752		3,867		55,619
Securities loaned		13,592		—		13,191		401		13,592
Other secured financings		7,408		—		5,987		1,431		7,418
Customer and other payables1		188,464		—		188,464		—		188,464
Borrowings		145,670		—		151,692		30		151,722

1. Accrued interest and dividend receivables and payables where carrying value approximates fair value have been excluded.

2. Amounts include loans measured at fair value on a nonrecurring basis.

55 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

Commitments—Held for Investment and Held for Sale

	Commitment Amount1		Fair Value
$ in millions			Level 2		Level 3		Total
March 31, 2018	$	117,582	$	643	$	185	$	828
December 31, 2017		100,151		620		174		794

1. For further discussion on lending commitments, see Note 11.

The previous tables exclude certain financial instruments such as equity method investments and all non-financial assets and liabilities such as the value of the long-term relationships with the Firm’s deposit customers. During the current quarter, there were no significant updates made to the Firm’s valuation techniques for financial instruments not measured at fair value.

March 2018 Form 10-Q 56

Notes to Consolidated Financial Statements (Unaudited)

4. Derivative Instruments and Hedging Activities

Derivative Fair Values
At March 31, 2018
	Assets
$ in millions	Bilateral OTC			Cleared OTC			Exchange- Traded			Total
Designated as accounting hedges
Interest rate contracts	$	804		$	1		$	—		$	805
Foreign exchange contracts		43			7			—			50
Total		847			8			—			855
Not designated as accounting hedges
Interest rate contracts		175,200			1,742			522			177,464
Credit contracts		5,352			1,981			—			7,333
Foreign exchange contracts		52,711			764			53			53,528
Equity contracts		25,320			—			24,222			49,542
Commodity and other contracts		10,295			—			1,572			11,867
Total		268,878			4,487			26,369			299,734
Total gross derivatives	$	269,725		$	4,495		$	26,369		$	300,589
Amounts offset
Counterparty netting		(198,282	)		(3,424	)		(22,787	)		(224,493	)
Cash collateral netting		(42,284	)		(664	)		—			(42,948	)
Total in Trading assets	$	29,159		$	407		$	3,582		$	33,148
Amounts not offset1
Financial instruments collateral		(12,646	)		—			—			(12,646	)
Other cash collateral		(20	)		—			—			(20	)
Net amounts	$	16,493		$	407		$	3,582		$	20,482
Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable										$	3,876

	Liabilities
$ in millions	Bilateral OTC			Cleared OTC			Exchange- Traded			Total
Designated as accounting hedges
Interest rate contracts	$	174		$	1		$	—		$	175
Foreign exchange contracts		107			22			—			129
Total		281			23			—			304
Not designated as accounting hedges
Interest rate contracts		159,276			1,267			443			160,986
Credit contracts		5,723			2,125			—			7,848
Foreign exchange contracts		52,493			835			44			53,372
Equity contracts		26,778			—			23,748			50,526
Commodity and other contracts		7,583			—			1,556			9,139
Total		251,853			4,227			25,791			281,871
Total gross derivatives	$	252,134		$	4,250		$	25,791		$	282,175
Amounts offset
Counterparty netting		(198,282	)		(3,424	)		(22,787	)		(224,493	)
Cash collateral netting		(31,280	)		(416	)		—			(31,696	)
Total in Trading liabilities	$	22,572		$	410		$	3,004		$	25,986
Amounts not offset1
Financial instruments collateral		(4,966	)		—			(374	)		(5,340	)
Other cash collateral		(38	)		(26	)		—			(64	)
Net amounts	$	17,568		$	384		$	2,630		$	20,582
Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable										$	4,366

At December 31, 2017
	Assets
$ in millions	Bilateral OTC			Cleared OTC			Exchange- Traded			Total
Designated as accounting hedges
Interest rate contracts	$	1,057		$	—		$	—		$	1,057
Foreign exchange contracts		57			6			—			63
Total		1,114			6			—			1,120
Not designated as accounting hedges
Interest rate contracts		177,948			1,700			234			179,882
Credit contracts		5,740			2,282			—			8,022
Foreign exchange contracts		52,878			798			58			53,734
Equity contracts		24,452			—			20,538			44,990
Commodity and other contracts		8,861			—			1,802			10,663
Total		269,879			4,780			22,632			297,291
Total gross derivatives	$	270,993		$	4,786		$	22,632		$	298,411
Amounts offset
Counterparty netting		(201,051	)		(3,856	)		(19,861	)		(224,768	)
Cash collateral netting		(42,141	)		(689	)		—			(42,830	)
Total in Trading assets	$	27,801		$	241		$	2,771		$	30,813
Amounts not offset1
Financial instruments collateral		(12,363	)		—			—			(12,363	)
Other cash collateral		(4	)		—			—			(4	)
Net amounts	$	15,434		$	241		$	2,771		$	18,446
Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable										$	3,154

	Liabilities
$ in millions	Bilateral OTC			Cleared OTC			Exchange- Traded			Total
Designated as accounting hedges
Interest rate contracts	$	67		$	1		$	—		$	68
Foreign exchange contracts		72			57			—			129
Total		139			58			—			197
Not designated as accounting hedges
Interest rate contracts		161,758			1,178			144			163,080
Credit contracts		6,273			2,272			—			8,545
Foreign exchange contracts		54,191			925			23			55,139
Equity contracts		27,993			—			19,996			47,989
Commodity and other contracts		7,117			—			1,772			8,889
Total		257,332			4,375			21,935			283,642
Total gross derivatives	$	257,471		$	4,433		$	21,935		$	283,839
Amounts offset
Counterparty netting		(201,051	)		(3,856	)		(19,861	)		(224,768	)
Cash collateral netting		(31,892	)		(484	)		—			(32,376	)
Total in Trading liabilities	$	24,528		$	93		$	2,074		$	26,695
Amounts not offset1
Financial instruments collateral		(5,523	)		—			(412	)		(5,935	)
Other cash collateral		(18	)		(14	)		—			(32	)
Net amounts	$	18,987		$	79		$	1,662		$	20,728
Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable										$	3,751

1. Amounts relate to master netting agreements and collateral agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance.

57 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

See Note 3 for information related to the unsettled fair value of futures contracts not designated as accounting hedges, which are excluded from the tables above.

Derivative Notionals

At March 31, 2018
	Assets
$ in billions	Bilateral OTC		Cleared OTC		Exchange- Traded		Total
Designated as accounting hedges
Interest rate contracts	$	20	$	26	$	—	$	46
Foreign exchange contracts		5		—		—		5
Total		25		26		—		51
Not designated as accounting hedges
Interest rate contracts		4,449		7,472		3,477		15,398
Credit contracts		165		90		—		255
Foreign exchange contracts		2,223		89		8		2,320
Equity contracts		402		—		383		785
Commodity and other contracts		94		—		61		155
Total		7,333		7,651		3,929		18,913
Total gross derivatives	$	7,358	$	7,677	$	3,929	$	18,964

	Liabilities
$ in billions	Bilateral OTC		Cleared OTC		Exchange- Traded		Total
Designated as accounting hedges
Interest rate contracts	$	2	$	133	$	—	$	135
Foreign exchange contracts		4		2		—		6
Total		6		135		—		141
Not designated as accounting hedges
Interest rate contracts		4,614		7,074		1,181		12,869
Credit contracts		188		83		—		271
Foreign exchange contracts		2,184		98		14		2,296
Equity contracts		425		—		474		899
Commodity and other contracts		74		—		53		127
Total		7,485		7,255		1,722		16,462
Total gross derivatives	$	7,491	$	7,390	$	1,722	$	16,603

At December 31, 2017
	Assets
$ in billions	Bilateral OTC		Cleared OTC		Exchange- Traded		Total
Designated as accounting hedges
Interest rate contracts	$	20	$	46	$	—	$	66
Foreign exchange contracts		4		—		—		4
Total		24		46		—		70
Not designated as accounting hedges
Interest rate contracts		3,999		6,458		2,714		13,171
Credit contracts		194		100		—		294
Foreign exchange contracts		1,960		67		9		2,036
Equity contracts		397		—		334		731
Commodity and other contracts		86		—		72		158
Total		6,636		6,625		3,129		16,390
Total gross derivatives	$	6,660	$	6,671	$	3,129	$	16,460

	Liabilities
$ in billions	Bilateral OTC		Cleared OTC		Exchange- Traded		Total
Designated as accounting hedges
Interest rate contracts	$	2	$	102	$	—	$	104
Foreign exchange contracts		4		2		—		6
Total		6		104		—		110
Not designated as accounting hedges
Interest rate contracts		4,199		6,325		1,089		11,613
Credit contracts		226		80		—		306
Foreign exchange contracts		2,014		78		51		2,143
Equity contracts		394		—		405		799
Commodity and other contracts		68		—		61		129
Total		6,901		6,483		1,606		14,990
Total gross derivatives	$	6,907	$	6,587	$	1,606	$	15,100

The Firm believes that the notional amounts of the derivative contracts generally overstate its exposure.

For information related to offsetting of certain collateralized transactions, see Note 6. For a discussion of the Firm’s derivative instruments and hedging activities, see Note 4 to the financial statements in the 2017 Form 10-K.

Gains (Losses) on Accounting Hedges

	Three Months Ended
	March 31,
$ in millions	2018			2017
Fair Value Hedges—Recognized in Interest Expense
Interest rate contracts	$	(1,841	)	$	(805	)
Borrowings		1,852			717
Net Investment Hedges—Foreign exchange contracts
Recognized in OCI	$	(148	)	$	(205	)
Forward points excluded from hedge effectiveness testing—Interest income		7		$	(9	)

Borrowings under Fair Value Hedges

$ in millions	At March 31, 2018
Carrying amount of Borrowings currently or previously hedged	$	107,264
Basis adjustments included in carrying amount—outstanding hedges		2,035

Hedge accounting basis adjustments for Borrowings are primarily related to outstanding hedges.

March 2018 Form 10-Q 58

Notes to Consolidated Financial Statements (Unaudited)

Trading Revenues by Product Type

	Three Months Ended
	March 31,
$ in millions	2018		2017
Interest rate contracts	$	871	$	594
Foreign exchange contracts		261		235
Equity security and index contracts1		1,877		1,641
Commodity and other contracts		435		189
Credit contracts		326		576
Total	$	3,770	$	3,235

1. Dividend income is included within equity security and index contracts.

The previous table summarizes gains and losses included in Trading revenues in the income statements. These activities include revenues related to derivative and non-derivative financial instruments. The Firm generally utilizes financial instruments across a variety of product types in connection with its market-making and related risk management strategies. The trading revenues presented in the table are not representative of the manner in which the Firm manages its business activities and are prepared in a manner similar to the presentation of trading revenues for regulatory reporting purposes.

Credit Risk-Related Contingencies

In connection with certain OTC trading agreements, the Firm may be required to provide additional collateral or immediately settle any outstanding liability balances with certain counterparties in the event of a credit rating downgrade of the Firm.

The following table presents the aggregate fair value of certain derivative contracts that contain credit risk-related contingent features that are in a net liability position for which the Firm has posted collateral in the normal course of business.

Net Derivative Liabilities and Collateral Posted

$ in millions	At March 31, 2018		At December 31, 2017
Net derivative liabilities with credit risk-related contingent features	$	17,213	$	20,675
Collateral posted		15,244		16,642

The additional collateral or termination payments that may be called in the event of a future credit rating downgrade vary by contract and can be based on ratings by either or both of Moody’s Investors Service, Inc. (“Moody’s”) and S&P Global Ratings. The following table shows the future potential collateral amounts and termination payments that could be called or required by counterparties or exchange and clearing organizations in the event of one-notch or two-notch

downgrade scenarios based on the relevant contractual downgrade triggers.

Incremental Collateral or Termination Payments upon Potential Future Ratings Downgrade

$ in millions	At March 31, 2018
One-notch downgrade	$	618
Two-notch downgrade		409
Bilateral downgrade agreements included in the amounts above1	$	910

1. Amount represents arrangements between the Firm and other parties where upon the downgrade of one party, the downgraded party must deliver collateral to the other party. These bilateral downgrade arrangements are used by the Firm to manage the risk of counterparty downgrades.

Credit Derivatives and Other Credit Contracts

The Firm enters into credit derivatives, principally CDS, under which it receives or provides protection against the risk of default on a set of debt obligations issued by a specified reference entity or entities. A majority of the Firm’s counterparties for these derivatives are banks, broker-dealers, and insurance and other financial institutions.

For further information on credit derivatives and other credit contracts, see Note 4 to the financial statements in the 2017 Form 10-K.

Protection Sold and Purchased with CDS

	At March 31, 2018
	Notional				Fair Value (Asset)/Liability
	Protection		Protection		Protection			Protection
$ in millions	Sold		Purchased		Sold			Purchased
Single name	$	133,209	$	152,446	$	(1,148	)	$	1,580
Index and basket		103,531		98,822		(163	)		5
Tranched index and basket		12,330		25,506		(276	)		517
Total	$	249,070	$	276,774	$	(1,587	)	$	2,102
Single name and non-tranched index and basket with identical underlying reference obligations	$	233,572	$	250,376

	At December 31, 2017
	Notional				Fair Value (Asset)/Liability
	Protection		Protection		Protection			Protection
$ in millions	Sold		Purchased		Sold			Purchased
Single name	$	146,948	$	164,773	$	(1,277	)	$	1,658
Index and basket		131,073		120,348		(341	)		209
Tranched index and basket		11,864		24,498		(342	)		616
Total	$	289,885	$	309,619	$	(1,960	)	$	2,483
Single name and non-tranched index and basket with identical underlying reference obligations	$	274,473	$	281,162

59 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

Fair value amounts as shown in the table below are on a gross basis prior to cash collateral or counterparty netting. In order to provide an indication of the current payment status or performance risk of the CDS, a breakdown of CDS based on the Firm’s internal credit ratings by investment grade and non-investment grade is provided. Internal credit ratings

serve as the Credit Risk Management Department’s assessment of credit risk and the basis for a comprehensive credit limits framework used to control credit risk. The Firm uses quantitative models and judgment to estimate the various risk parameters related to each obligor.

Credit Ratings of Reference Obligation and Maturities of Credit Protection Sold

	At March 31, 2018
	Maximum Potential Payout/Notional										Fair Value (Asset)/ Liability
	Years to Maturity
$ in millions	Less than 1		1-3		3-5		Over 5		Total
Single name CDS
Investment grade	$	33,332	$	35,927	$	17,621	$	10,658	$	97,538	$	(1,124	)
Non-investment grade		12,994		13,871		6,813		1,993		35,671		(24	)
Total single name CDS	$	46,326	$	49,798	$	24,434	$	12,651	$	133,209	$	(1,148	)
Index and basket CDS
Investment grade	$	29,448	$	14,049	$	16,003	$	10,902	$	70,402	$	(811	)
Non-investment grade		5,941		6,139		17,681		15,698		45,459		372
Total index and basket CDS	$	35,389	$	20,188	$	33,684	$	26,600	$	115,861	$	(439	)
Total CDS sold	$	81,715	$	69,986	$	58,118	$	39,251	$	249,070	$	(1,587	)
Other credit contracts		—		2		—		127		129		20
Total credit derivatives and other credit contracts	$	81,715	$	69,988	$	58,118	$	39,378	$	249,199	$	(1,567	)

	At December 31, 2017
	Maximum Potential Payout/Notional										Fair Value (Asset)/ Liability
	Years to Maturity
$ in millions	Less than 1		1-3		3-5		Over 5		Total
Single name CDS
Investment grade	$	39,721	$	42,591	$	18,157	$	8,872	$	109,341	$	(1,167	)
Non-investment grade		14,213		16,293		6,193		908		37,607		(110	)
Total single name CDS	$	53,934	$	58,884	$	24,350	$	9,780	$	146,948	$	(1,277	)
Index and basket CDS
Investment grade	$	29,046	$	15,418	$	37,343	$	6,807	$	88,614	$	(1,091	)
Non-investment grade		5,246		7,371		32,417		9,289		54,323		408
Total index and basket CDS	$	34,292	$	22,789	$	69,760	$	16,096	$	142,937	$	(683	)
Total CDS sold	$	88,226	$	81,673	$	94,110	$	25,876	$	289,885	$	(1,960	)
Other credit contracts		2		—		—		134		136		16
Total credit derivatives and other credit contracts	$	88,228	$	81,673	$	94,110	$	26,010	$	290,021	$	(1,944	)

March 2018 Form 10-Q 60

Notes to Consolidated Financial Statements (Unaudited)

5. Investment Securities

The following tables present information about the Firm’s AFS securities, which are carried at fair value, and HTM securities, which are carried at amortized cost. The net unrealized gains or losses on AFS securities are reported on an after-tax basis as a component of AOCI.

AFS and HTM Securities

	At March 31, 2018
$ in millions	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
AFS securities
U.S. government and agency securities:
U.S. Treasury securities	$	30,032	$	—	$	833	$	29,199
U.S. agency securities1		22,084		32		504		21,612
Total U.S. government and agency securities		52,116		32		1,337		50,811
Corporate and other debt:
Agency CMBS		1,302		2		59		1,245
Non-agency CMBS		857		2		17		842
Corporate bonds		1,346		—		28		1,318
CLO		351		1		—		352
FFELP student loan ABS2		2,173		15		7		2,181
Total corporate and other debt		6,029		20		111		5,938
Total AFS securities		58,145		52		1,448		56,749
HTM securities
U.S. government and agency securities:
U.S. Treasury securities		11,817		—		490		11,327
U.S. agency securities1		11,747		—		477		11,270
Total U.S. government and agency securities		23,564		—		967		22,597
Corporate and other debt:
Non-agency CMBS		328		—		6		322
Total HTM securities		23,892		—		973		22,919
Total investment securities	$	82,037	$	52	$	2,421	$	79,668

	At December 31, 2017
$ in millions	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
AFS debt securities
U.S. government and agency securities:
U.S. Treasury securities	$	26,842	$	—	$	589	$	26,253
U.S. agency securities1		22,803		28		247		22,584
Total U.S. government and agency securities		49,645		28		836		48,837
Corporate and other debt:
Agency CMBS		1,370		2		49		1,323
Non-agency CMBS		1,102		—		8		1,094
Corporate bonds		1,379		5		12		1,372
CLO		398		1		—		399
FFELP student loan ABS2		2,165		15		7		2,173
Total corporate and other debt		6,414		23		76		6,361
Total AFS debt securities		56,059		51		912		55,198
AFS equity securities		15		—		10		5
Total AFS securities		56,074		51		922		55,203
HTM securities
U.S. government and agency securities:
U.S. Treasury securities		11,424		—		305		11,119
U.S. agency securities1		11,886		7		220		11,673
Total U.S. government and agency securities		23,310		7		525		22,792
Corporate and other debt:
Non-agency CMBS		289		1		1		289
Total HTM securities		23,599		8		526		23,081
Total investment securities	$	79,673	$	59	$	1,448	$	78,284

1. U.S. agency securities consist mainly of agency-issued debt, agency mortgage pass-through pool securities and CMOs.

2. Amounts are backed by a guarantee from the U.S. Department of Education of at least 95% of the principal balance and interest on such loans.

61 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

Investment Securities in an Unrealized Loss Position

	At March 31, 2018
	Less than 12 Months				12 Months or Longer				Total
$ in millions	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
AFS securities
U.S. government and agency securities:
U.S. Treasury securities	$	25,041	$	711	$	3,958	$	122	$	28,999	$	833
U.S. agency securities		12,634		402		2,417		102		15,051		504
Total U.S. government and agency securities		37,675		1,113		6,375		224		44,050		1,337
Corporate and other debt:
Agency CMBS		910		59		—		—		910		59
Non-agency CMBS		309		7		242		10		551		17
Corporate bonds		809		13		383		15		1,192		28
FFELP student loan ABS		1,006		7		—		—		1,006		7
Total corporate and other debt		3,034		86		625		25		3,659		111
Total AFS securities		40,709		1,199		7,000		249		47,709		1,448
HTM securities
U.S. government and agency securities:
U.S. Treasury securities		6,585		177		4,742		313		11,327		490
U.S. agency securities		4,404		119		6,866		358		11,270		477
Total U.S. government and agency securities		10,989		296		11,608		671		22,597		967
Corporate and other debt:
Non-agency CMBS		220		6		—		—		220		6
Total HTM securities		11,209		302		11,608		671		22,817		973
Total investment securities	$	51,918	$	1,501	$	18,608	$	920	$	70,526	$	2,421

	At December 31, 2017
	Less than 12 Months				12 Months or Longer				Total
$ in millions	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
AFS debt securities
U.S. government and agency securities:
U.S. Treasury securities	$	21,941	$	495	$	4,287	$	94	$	26,228	$	589
U.S. agency securities		12,673		192		2,513		55		15,186		247
Total U.S. government and agency securities		34,614		687		6,800		149		41,414		836
Corporate and other debt:
Agency CMBS		930		49		—		—		930		49
Non-agency CMBS		257		1		559		7		816		8
Corporate bonds		316		3		389		9		705		12
FFELP student loan ABS		984		7		—		—		984		7
Total corporate and other debt		2,487		60		948		16		3,435		76
Total AFS debt securities		37,101		747		7,748		165		44,849		912
AFS equity securities		—		—		5		10		5		10
Total AFS securities		37,101		747		7,753		175		44,854		922
HTM securities
U.S. government and agency securities:
U.S. Treasury securities		6,608		86		4,512		219		11,120		305
U.S. agency securities		2,879		24		7,298		196		10,177		220
Total U.S. government and agency securities		9,487		110		11,810		415		21,297		525
Corporate and other debt:
Non-agency CMBS		124		1		—		—		124		1
Total HTM securities		9,611		111		11,810		415		21,421		526
Total investment securities	$	46,712	$	858	$	19,563	$	590	$	66,275	$	1,448

March 2018 Form 10-Q 62

Notes to Consolidated Financial Statements (Unaudited)

The Firm believes there are no securities in an unrealized loss position that are other-than-temporarily impaired after performing the analysis described in Note 2 to the financial statements in the 2017 Form 10-K. For AFS debt securities, the Firm does not intend to sell the securities and is not likely to be required to sell the securities prior to recovery of amortized cost basis. Furthermore, for AFS and HTM debt securities, the securities have not experienced credit losses as the net unrealized losses reported in the previous table are primarily due to higher interest rates since those securities were purchased.

See Note 12 for additional information on securities issued by VIEs, including U.S. agency mortgage-backed securities, non-agency CMBS, CLO and FFELP student loan ABS.

Investment Securities by Contractual Maturity

	At March 31, 2018
$ in millions	Amortized Cost		Fair Value		Annualized Average Yield
AFS securities
U.S. government and agency securities:
U.S. Treasury securities:
Due within 1 year	$	6,153	$	6,132		0.9%
After 1 year through 5 years		19,385		18,906		1.6%
After 5 years through 10 years		4,494		4,161		1.4%
Total		30,032		29,199
U.S. agency securities:
Due within 1 year		43		42		1.1%
After 1 year through 5 years		1,899		1,883		1.0%
After 5 years through 10 years		1,555		1,506		1.8%
After 10 years		18,587		18,181		2.0%
Total		22,084		21,612
Total U.S. government and agency securities		52,116		50,811		1.6%
Corporate and other debt:
Agency CMBS:
Due within 1 year		19		19		1.3%
After 1 year through 5 years		431		430		1.3%
After 5 years through 10 years		47		47		1.2%
After 10 years		805		749		1.6%
Total		1,302		1,245

	At March 31, 2018
$ in millions	Amortized Cost		Fair Value		Annualized Average Yield
Non-agency CMBS:
After 5 years through 10 years	$	36	$	35		2.5%
After 10 years		821		807		1.9%
Total		857		842
Corporate bonds:
Due within 1 year		97		97		1.6%
After 1 year through 5 years		1,175		1,150		2.4%
After 5 years through 10 years		74		71		2.5%
Total		1,346		1,318
CLO:
After 5 years through 10 years		153		153		1.5%
After 10 years		198		199		2.4%
Total		351		352
FFELP student loan ABS:
After 1 year through 5 years		48		47		0.8%
After 5 years through 10 years		390		388		0.8%
After 10 years		1,735		1,746		1.1%
Total		2,173		2,181
Total corporate and other debt		6,029		5,938		1.6%
Total AFS securities		58,145		56,749		1.6%
HTM securities
U.S. government securities:
U.S. Treasury securities:
Due within 1 year		2,027		2,012		1.2%
After 1 year through 5 years		3,952		3,871		1.8%
After 5 years through 10 years		5,112		4,807		1.9%
After 10 years		726		637		2.3%
Total		11,817		11,327
U.S. agency securities:
After 5 years through 10 years		34		33		1.9%
After 10 years		11,713		11,237		2.6%
Total		11,747		11,270
Total U.S. government and agency
securities		23,564		22,597		2.2%
Corporate and other debt:
Non-agency CMBS:
After 1 year through 5 years		92		92		3.6%
After 5 years through 10 years		217		212		3.9%
After 10 years		19		18		4.1%
Total corporate and other debt		328		322		3.8%
Total HTM securities		23,892		22,919		2.2%
Total investment securities	$	82,037	$	79,668		1.8%

63 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

6. Collateralized Transactions

The Firm enters into securities purchased under agreements to resell, securities sold under agreements to repurchase, securities borrowed and securities loaned transactions to, among other things, acquire securities to cover short positions and settle other securities obligations, to accommodate customers’ needs and to finance its inventory positions. For further discussion of the Firm’s collateralized transactions, see Note 6 to the financial statements in the 2017 Form 10-K.

Offsetting of Certain Collateralized Transactions

	At March 31, 2018
$ in millions	Gross Amounts		Amounts Offset			Net Amounts Presented		Amounts Not Offset1			Net Amounts
Assets
Securities purchased under agreements to resell	$	185,498	$	(105,252	)	$	80,246	$	(74,843	)	$	5,403
Securities borrowed		149,347		(13,512	)		135,835		(132,271	)		3,564
Liabilities
Securities sold under agreements to repurchase	$	156,827	$	(105,252	)	$	51,575	$	(45,207	)	$	6,368
Securities loaned		27,068		(13,512	)		13,556		(13,336	)		220
Net amounts for which master netting agreements are not in place or may not be legally enforceable
Securities purchased under agreements to resell											$	5,212
Securities borrowed												669
Securities sold under agreements to repurchase												5,118
Securities loaned												194

	At December 31, 2017
$ in millions	Gross Amounts		Amounts Offset			Net Amounts Presented		Amounts Not Offset1			Net Amounts
Assets
Securities purchased under agreements to resell	$	199,044	$	(114,786	)	$	84,258	$	(78,009	)	$	6,249
Securities borrowed		133,431		(9,421	)		124,010		(119,358	)		4,652
Liabilities
Securities sold under agreements to repurchase	$	171,210	$	(114,786	)	$	56,424	$	(48,067	)	$	8,357
Securities loaned		23,014		(9,422	)		13,592		(13,271	)		321
Net amounts for which master netting agreements are not in place or may not be legally enforceable
Securities purchased under agreements to resell											$	5,687
Securities borrowed												572
Securities sold under agreements to repurchase												6,945
Securities loaned												307

1. Amounts relate to master netting agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance.

For information related to offsetting of derivatives, see Note 4.

Maturities and Collateral Pledged

Gross Secured Financing Balances by Remaining Contractual Maturity

	At March 31, 2018
$ in millions	Overnight and Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
Securities sold under agreements to repurchase	$	39,192	$	49,822	$	27,926	$	39,887	$	156,827
Securities loaned		16,869		603		2,045		7,551		27,068
Total included in the offsetting disclosure	$	56,061	$	50,425	$	29,971	$	47,438	$	183,895
Trading liabilities— Obligation to return securities received as collateral		18,136		—		610		—		18,746
Total	$	74,197	$	50,425	$	30,581	$	47,438	$	202,641

	At December 31, 2017
$ in millions	Overnight and Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
Securities sold under agreements to repurchase	$	41,332	$	66,593	$	28,682	$	34,603	$	171,210
Securities loaned		12,130		873		1,577		8,434		23,014
Total included in the offsetting disclosure	$	53,462	$	67,466	$	30,259	$	43,037	$	194,224
Trading liabilities— Obligation to return securities received as collateral		22,555		—		—		—		22,555
Total	$	76,017	$	67,466	$	30,259	$	43,037	$	216,779

Gross Secured Financing Balances by Class of Collateral Pledged

$ in millions	At March 31, 2018		At December 31, 2017
Securities sold under agreements to repurchase
U.S. government and agency securities	$	37,361	$	43,346
State and municipal securities		1,643		2,451
Other sovereign government obligations		78,844		87,141
ABS		2,204		1,130
Corporate and other debt		10,063		7,737
Corporate equities		25,893		28,497
Other		819		908
Total	$	156,827	$	171,210
Securities loaned
U.S. government and agency securities	$	6	$	81
Other sovereign government obligations		14,077		9,489
Corporate and other debt		28		14
Corporate equities		12,770		13,174
Other		187		256
Total	$	27,068	$	23,014
Total included in the offsetting disclosure	$	183,895	$	194,224
Trading liabilities—Obligation to return securities received as collateral
Corporate equities	$	18,746	$	22,555
Total	$	202,641	$	216,779

March 2018 Form 10-Q 64

Notes to Consolidated Financial Statements (Unaudited)

Assets Pledged

The Firm pledges its trading assets and loans to collateralize securities sold under agreements to repurchase, securities loaned, other secured financings and derivatives. Counterparties may or may not have the right to sell or repledge the collateral.

Pledged financial instruments that can be sold or repledged by the secured party are identified as Trading assets (pledged to various parties) in the balance sheets.

Carrying Value of Assets Loaned or Pledged without Counterparty Right to Sell or Repledge
$ in millions	At March 31, 2018		At December 31, 2017
Trading assets	$	34,590	$	31,324
Loans (gross of allowance for loan losses)		342		228
Total	$	34,932	$	31,552

Collateral Received

The Firm receives collateral in the form of securities in connection with securities purchased under agreements to resell, securities borrowed, securities-for-securities transactions, derivative transactions, customer margin loans and securities-based lending. In many cases, the Firm is permitted to sell or repledge these securities held as collateral and use the securities to secure securities sold under agreements to repurchase, to enter into securities lending and derivative transactions or for delivery to counterparties to cover short positions.

Fair Value of Collateral Received with Right to Sell or Repledge
$ in millions	At March 31, 2018		At December 31, 2017
Collateral received with right to sell or repledge	$	597,886	$	599,244
Collateral that was sold or repledged		471,985		475,113

Customer Margin Lending and Other

$ in millions	At March 31, 2018		At December 31, 2017
Net customer receivables representing margin loans	$	34,382	$	32,112

The Firm provides margin lending arrangements which allow the client to borrow against the value of qualifying securities. Margin loans are included within Customer and other receivables in the balance sheets. Under these agreements and transactions, the Firm receives collateral, including U.S.

government and agency securities, other sovereign government obligations, corporate and other debt, and corporate equities. Customer receivables generated from margin lending activities are collateralized by customer-owned securities held by the Firm. The Firm monitors required margin levels and established credit terms daily and, pursuant to such guidelines, requires customers to deposit additional collateral, or reduce positions, when necessary.

For a further discussion of the Firm’s margin lending activities, see Note 6 to the financial statements in the 2017 Form 10-K.

The Firm has additional secured liabilities. For a further discussion of other secured financings, see Note 10.

Restricted Cash and Segregated Securities
$ in millions	At March 31, 2018		At December 31, 2017
Restricted cash	$	35,291	$	34,231
Segregated securities1		18,917		20,549
Total	$	54,208	$	54,780

1. Securities segregated under federal regulations for the Firm’s U.S. broker-dealers are sourced from Securities purchased under agreements to resell and Trading assets in the balance sheets.

7. Loans, Lending Commitments and Allowance for Credit Losses

Loans

The Firm’s loans held for investment are recorded at amortized cost, and its loans held for sale are recorded at the lower of cost or fair value in the balance sheets. For a further description of these loans, refer to Note 7 to the financial statements in the 2017 Form 10-K. See Note 3 for further information regarding Loans and lending commitments held at fair value. See Note 11 for details of current commitments to lend in the future.

Loans by Type
	At March 31, 2018
$ in millions	Loans Held for Investment			Loans Held for Sale		Total Loans
Corporate loans	$	31,903		$	12,000	$	43,903
Consumer loans		26,877			—		26,877
Residential real estate loans		26,566			33		26,599
Wholesale real estate loans		10,021			1,978		11,999
Total loans, gross		95,367			14,011		109,378
Allowance for loan losses		(243	)		—		(243	)
Total loans, net	$	95,124		$	14,011	$	109,135

65 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

	At December 31, 2017
$ in millions	Loans Held for Investment			Loans Held for Sale		Total Loans
Corporate loans	$	29,754		$	9,456	$	39,210
Consumer loans		26,808			—		26,808
Residential real estate loans		26,635			35		26,670
Wholesale real estate loans		9,980			1,682		11,662
Total loans, gross		93,177			11,173		104,350
Allowance for loan losses		(224	)		—		(224	)
Total loans, net	$	92,953		$	11,173	$	104,126

Loans by Interest Rate Type
$ in millions	At March 31, 2018		At December 31, 2017
Fixed	$	14,252	$	13,339
Floating or adjustable		94,883		90,787
Total loans, net	$	109,135	$	104,126

Loans to Non-U.S. Borrowers
$ in millions	At March 31, 2018			At December 31, 2017
Loans, net		$	16,110		$	9,977

Credit Quality

For a further discussion about the Firm’s evaluation of credit transactions and monitoring and credit quality indicators, as well as factors considered by the Firm in determining the allowance for loan losses and impairments, see Notes 2 and 7 to the financial statements in the 2017 Form 10-K.

Loans Held for Investment before Allowance by Credit Quality
	At March 31, 2018
$ in millions	Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
Pass	$	31,327	$	26,872	$	26,492	$	9,126	$	93,817
Special mention		162		5		—		460		627
Substandard		405		—		74		435		914
Doubtful		9		—		—		—		9
Loss		—		—		—		—		—
Total	$	31,903	$	26,877	$	26,566	$	10,021	$	95,367

	At December 31, 2017
$ in millions	Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
Pass	$	29,166	$	26,802	$	26,562	$	9,480	$	92,010
Special mention		188		6		—		200		394
Substandard		393		—		73		300		766
Doubtful		7		—		—		—		7
Loss		—		—		—		—		—
Total	$	29,754	$	26,808	$	26,635	$	9,980	$	93,177

The following loans and lending commitments have been evaluated for a specific allowance. All remaining loans and lending commitments are assessed under the inherent allowance methodology.

Impaired Loans and Lending Commitments before Allowance
	At March 31, 2018
$ in millions	Corporate		Residential Real Estate		Total
Loans
With allowance	$	15	$	—	$	15
Without allowance1		69		49		118
UPB		95		51		146
Lending Commitments
Without allowance1	$	226	$	—	$	226
	At December 31, 2017
$ in millions	Corporate		Residential Real Estate		Total
Loans
With allowance	$	16	$	—	$	16
Without allowance1		118		45		163
UPB		146		46		192
Lending Commitments
Without allowance1	$	199	$	—	$	199

1. At March 31, 2018 and December 31, 2017, no allowance was recorded for these loans and lending commitments as the present value of the expected future cash flows (or, alternatively, the observable market price of the instrument or the fair value of the collateral held) equaled or exceeded the carrying value.

Impaired Loans and Allowance by Region
	At March 31, 2018
$ in millions	Americas		EMEA		Asia		Total
Impaired loans	$	129	$	—	$	4	$	133
Allowance for loan losses		199	$	42	$	2	$	243
	At December 31, 2017
$ in millions	Americas		EMEA		Asia		Total
Impaired loans	$	160	$	9	$	10	$	179
Allowance for loan losses		194		27		3		224

Troubled Debt Restructurings
$ in millions	At March 31, 2018		At December 31, 2017
Loans	$	52	$	51
Lending commitments		25		28
Allowance for loan losses and lending commitments		6		10

Impaired loans and lending commitments classified as held for investment within corporate loans include TDRs as shown in the previous table. These restructurings typically include modifications of interest rates, collateral requirements, other loan covenants and payment extensions.

March 2018 Form 10-Q 66

Notes to Consolidated Financial Statements (Unaudited)

Allowance for Loan Losses Rollforward
$ in millions	Corporate			Consumer		Residential Real Estate			Wholesale Real Estate		Total
December 31, 2017	$	126		$	4	$	24		$	70	$	224
Provision (release)		6			—		(1	)		14		19
Other		(1	)		—		—			1		—
March 31, 2018	$	131		$	4	$	23		$	85	$	243
Inherent	$	126		$	4	$	23		$	85	$	238
Specific		5			—		—			—		5

$ in millions	Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
December 31, 2016	$	195	$	4	$	20	$	55	$	274
Recoveries		1		—		—		—		1
Provision (release)		13		—		—		9		22
March 31, 2017	$	209	$	4	$	20	$	64	$	297
Inherent	$	142	$	4	$	20	$	64	$	230
Specific		67		—		—		—		67

Allowance for Lending Commitments Rollforward
$ in millions	Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
December 31, 2017	$	194	$	1	$	—	$	3	$	198
Provision (release)		7		—		—		—		7
Other		—		—		—		—		—
March 31, 2018	$	201	$	1	$	—	$	3	$	205
Inherent	$	200	$	1	$	—	$	3	$	204
Specific		1		—		—		—		1

$ in millions	Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
December 31, 2016	$	185	$	1	$	—	$	4	$	190
Provision (release)		3		—		—		—		3
March 31, 2017	$	188	$	1	$	—	$	4	$	193
Inherent	$	186	$	1	$	—	$	4	$	191
Specific		2		—		—		—		2

Employee Loans
$ in millions	At March 31, 2018			At December 31, 2017
Balance	$	3,687		$	4,185
Allowance for loan losses		(75	)		(77	)
Balance, net	$	3,612		$	4,108
Repayment term range, in years		1 to 20			1 to 20

Employee loans are granted in conjunction with a program established to retain and recruit certain employees, are full recourse and generally require periodic repayments. These loans are recorded in Customer and other receivables in the balance sheets. The Firm establishes an allowance for loan amounts it does not consider recoverable, and the related provision is recorded in Compensation and benefits expense.

8. Equity Method Investments

Overview

Equity method investments other than certain investments in funds are summarized below and included in Other assets in the balance sheets with related income or loss included in Other revenues in the income statements. See the Measured Based on Net Asset Value table in Note 3 for the carrying value of the Firm’s fund interests, which are comprised of general and limited partnership interests, as well as any related performance fees in the form of carried interest.

Equity Method Investment Balances

$ in millions	At March 31, 2018		At December 31, 2017
Investments	$	2,662	$	2,623

	Three Months Ended March 31,
$ in millions	2018		2017
Income (loss)	$	50	$	9

Japanese Securities Joint Venture

Included in the equity method investments is the Firm’s 40% voting interest in Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. (“MUMSS”). Mitsubishi UFJ Financial Group, Inc. (“MUFG”) holds a 60% voting interest. The Firm accounts for its equity method investment in MUMSS within the Institutional Securities business segment.

	Three Months Ended March 31,
$ in millions	2018		2017
Income from investment in MUMSS	$	56	$	48

67 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

9. Deposits

Deposits

$ in millions	At March 31, 2018		At December 31, 2017
Savings and demand deposits	$	138,358	$	144,487
Time deposits		22,066		14,949
Total	$	160,424	$	159,436
Deposits subject to FDIC insurance	$	129,968	$	127,017
Time deposits that equal or exceed the FDIC insurance limit	$	10	$	38

Time Deposit Maturities

$ in millions	At March 31, 2018
2018	$	13,164
2019		4,803
2020		2,257
2021		747
2022		418
Thereafter		677

10. Borrowings and Other Secured Financings

Borrowings

$ in millions	At March 31, 2018		At December 31, 2017
Original maturities of one year or less	$	1,256	$	1,519
Original maturities greater than one year
Senior	$	183,712	$	180,835
Subordinated		9,996		10,228
Total	$	193,708	$	191,063
Total borrowings	$	194,964	$	192,582
Weighted average stated maturity, in years1		6.6		6.6

1. Includes only borrowings with original maturities greater than one year.

Other Secured Financings

Other secured financings include the liabilities related to pledged commodities, certain ELNs, transfers of financial assets that are accounted for as financings rather than sales, consolidated VIEs where the Firm is deemed to be the primary beneficiary and other secured borrowings. These liabilities are generally payable from the cash flows of the related assets accounted for as Trading assets. See Note 12 for further information on other secured financings related to VIEs and securitization activities.

Other Secured Financings by Original Maturity and Type

$ in millions	At March 31, 2018		At December 31, 2017
Original maturities:
Greater than one year	$	8,159	$	8,685
One year or less		1,406		2,034
Failed sales1		710		552
Total	$	10,275	$	11,271

1. For more information on failed sales, see Note 12.

11. Commitments, Guarantees and Contingencies

Commitments

The Firm’s commitments are summarized in the following table by years to maturity. Since commitments associated with these instruments may expire unused, the amounts shown do not necessarily reflect the actual future cash funding requirements.

	Years to Maturity at March 31, 2018
$ in millions	Less than 1		1-3		3-5		Over 5		Total
Lending:
Corporate	$	14,447	$	43,086	$	46,618	$	7,454	$	111,605
Consumer		6,598		—		8		3		6,609
Residential real estate		5		64		33		259		361
Wholesale real estate		183		833		25		—		1,041
Forward-starting secured financing receivables		85,399		—		—		1,177		86,576
Underwriting		344		—		—		—		344
Investment activities		527		96		62		230		915
Letters of credit and other financial guarantees		195		—		1		41		237
Total	$	107,698	$	44,079	$	46,747	$	9,164	$	207,688
Corporate lending commitments participated to third parties									$	6,877
Forward-starting secured financing receivables settled within three business days									$	72,754

For a further description of these commitments, refer to Note 12 to the financial statements in the 2017 Form 10-K.

March 2018 Form 10-Q 68

Notes to Consolidated Financial Statements (Unaudited)

Guarantees

Obligations under Guarantee Arrangements at March 31, 2018

	Maximum Potential Payout/Notional
	Years to Maturity
$ in millions	Less than 1		1-3		3-5		Over 5		Total
Credit derivatives	$	81,715	$	69,986	$	58,118	$	39,251	$	249,070
Other credit contracts		—		2		—		127		129
Non-credit derivatives		1,903,988		1,196,331		379,171		639,749		4,119,239
Standby letters of credit and other financial guarantees issued1		806		1,114		1,272		4,903		8,095
Market value guarantees		40		62		58		—		160
Liquidity facilities		3,367		—		—		—		3,367
Whole loan sales guarantees		—		1		1		23,223		23,225
Securitization representations and warranties		—		—		—		60,861		60,861
General partner guarantees		33		52		324		27		436

$ in millions	Carrying Amount (Asset)/ Liability			Collateral/ Recourse
Credit derivatives2	$	(1,587	)	$	—
Other credit contracts		20			—
Non-credit derivatives2		45,314			—
Standby letters of credit and other financial guarantees issued1		(182	)		6,588
Market value guarantees		—			—
Liquidity facilities		(5	)		5,475
Whole loan sales guarantees		8			—
Securitization representations and warranties		91			—
General partner guarantees		59			—

1. These amounts include certain issued standby letters of credit participated to third parties, totaling $0.7 billion of notional and collateral/recourse, due to the nature of the Firm’s obligations under these arrangements.

2. Carrying amounts of derivative contracts are shown on a gross basis prior to cash collateral or counterparty netting. For further information on derivative contracts, see Note 4.

The Firm also has obligations under certain guarantee arrangements, including contracts and indemnification agreements, that contingently require the Firm to make payments to the guaranteed party based on changes in an underlying measure (such as an interest or foreign exchange rate, security or commodity price, an index, or the occurrence or non-occurrence of a specified event) related to an asset, liability or equity security of a guaranteed party. Also included as guarantees are contracts that contingently require the Firm to make payments to the guaranteed party based on another entity’s failure to perform under an agreement, as well as indirect guarantees of the indebtedness of others.

In certain situations, collateral may be held by the Firm for those contracts that meet the definition of a guarantee. Generally, the Firm sets collateral requirements by counterparty so that the collateral covers various transactions and products and is not allocated specifically to individual contracts. Also, the Firm may recover amounts related to the underlying asset delivered to the Firm under the derivative contract.

For more information on the nature of the obligation and related business activity for market value guarantees, liquidity facilities, whole loan sales guarantees and general partner guarantees related to certain investment management funds, as well as the other products in the previous table, see Note 12 to the financial statements in the 2017 Form 10-K.

Other Guarantees and Indemnities

In the normal course of business, the Firm provides guarantees and indemnifications in a variety of transactions. These provisions generally are standard contractual terms. Certain of these guarantees and indemnifications related to indemnities, exchange/clearinghouse member guarantees and merger and acquisition guarantees are described in Note 12 to the financial statements in the 2017 Form 10-K.

In addition, in the ordinary course of business, the Firm guarantees the debt and/or certain trading obligations (including obligations associated with derivatives, foreign exchange contracts and the settlement of physical commodities) of certain subsidiaries. These guarantees generally are entity or product specific and are required by investors or trading counterparties. The activities of the Firm’s subsidiaries covered by these guarantees (including any related debt or trading obligations) are included in the financial statements.

Finance Subsidiary

The Parent Company fully and unconditionally guarantees the securities issued by Morgan Stanley Finance LLC, a 100%-owned finance subsidiary.

Contingencies

Legal. In addition to the matters described below, in the normal course of business, the Firm has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with its activities as a global diversified financial services institution. Certain of the actual or threatened legal actions include claims for substantial compensatory and/or

69 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

punitive damages or claims for indeterminate amounts of damages. In some cases, the entities that would otherwise be the primary defendants in such cases are bankrupt or are in financial distress. These actions have included, but are not limited to, residential mortgage and credit crisis-related matters.

Over the last several years, the level of litigation and investigatory activity (both formal and informal) by governmental and self-regulatory agencies has increased materially in the financial services industry. As a result, the Firm expects that it will continue to be the subject of elevated claims for damages and other relief and, while the Firm has identified below any individual proceedings where the Firm believes a material loss to be reasonably possible and reasonably estimable, there can be no assurance that material losses will not be incurred from claims that have not yet been asserted or are not yet determined to be probable or possible and reasonably estimable losses.

The Firm contests liability and/or the amount of damages as appropriate in each pending matter. Where available information indicates that it is probable a liability had been incurred at the date of the financial statements and the Firm can reasonably estimate the amount of that loss, the Firm accrues the estimated loss by a charge to income.

In many proceedings and investigations, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss. In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is not always possible to reasonably estimate the size of the possible loss or range of loss.

For certain legal proceedings and investigations, the Firm cannot reasonably estimate such losses, particularly for proceedings and investigations where the factual record is being developed or contested or where plaintiffs or government entities seek substantial or indeterminate damages, restitution, disgorgement or penalties. Numerous issues may need to be resolved, including through potentially lengthy discovery and determination of important factual matters, determination of issues related to class certification and the calculation of damages or other relief, and by addressing novel or unsettled legal questions relevant to the proceedings or investigations in question, before a loss or additional loss or range of loss or additional range of loss can be reasonably estimated for a proceeding or investigation.

For certain other legal proceedings and investigations, the Firm can estimate reasonably possible losses, additional

losses, ranges of loss or ranges of additional loss in excess of amounts accrued, but does not believe, based on current knowledge and after consultation with counsel, that such losses will have a material adverse effect on the Firm’s financial statements as a whole, other than the matters referred to in the following paragraphs.

On July 15, 2010, China Development Industrial Bank (“CDIB”) filed a complaint against the Firm, styled China Development Industrial Bank v. Morgan Stanley & Co. Incorporated et al., which is pending in the Supreme Court of the State of New York, New York County (“Supreme Court of NY”). The complaint relates to a $275 million CDS referencing the super senior portion of the STACK 2006-1 CDO. The complaint asserts claims for common law fraud, fraudulent inducement and fraudulent concealment and alleges that the Firm misrepresented the risks of the STACK 2006-1 CDO to CDIB, and that the Firm knew that the assets backing the CDO were of poor quality when it entered into the CDS with CDIB. The complaint seeks compensatory damages related to the approximately $228 million that CDIB alleges it has already lost under the CDS, rescission of CDIB’s obligation to pay an additional $12 million, punitive damages, equitable relief, fees and costs. On February 28, 2011, the court denied the Firm’s motion to dismiss the complaint. Based on currently available information, the Firm believes it could incur a loss in this action of up to approximately $240 million plus pre- and post-judgment interest, fees and costs.

On May 3, 2013, plaintiffs in Deutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al. filed a complaint against the Firm, certain affiliates, and other defendants in the Supreme Court of NY. The complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by the Firm to plaintiff was approximately $634 million. The complaint alleges causes of action against the Firm for common law fraud, fraudulent concealment, aiding and abetting fraud, negligent misrepresentation, and rescission and seeks, among other things, compensatory and punitive damages. On June 10, 2014, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. On June 20, 2017 the Appellate Division affirmed the lower court’s June 10, 2014 order. On October 3, 2017, the Appellate Division denied the Firm’s motion for leave to appeal to the New York Court of Appeals. At March 25, 2018, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $211 million, and the certificates had incurred

March 2018 Form 10-Q 70

Notes to Consolidated Financial Statements (Unaudited)

actual losses of approximately $89 million. Based on currently available information, the Firm believes it could incur a loss in this action up to the difference between the $211 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against the Firm, or upon sale, plus pre- and post-judgment interest, fees and costs. The Firm may be entitled to be indemnified for some of these losses.

On July 8, 2013, U.S. Bank National Association, in its capacity as trustee, filed a complaint against the Firm styled U.S. Bank National Association, solely in its capacity as Trustee of the Morgan Stanley Mortgage Loan Trust 2007-2AX (MSM 2007-2AX) v. Morgan Stanley Mortgage Capital Holdings LLC, Successor-by-Merger to Morgan Stanley Mortgage Capital Inc. and GreenPoint Mortgage Funding, Inc., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $650 million, breached various representations and warranties. The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, unspecified damages and interest. On August 22, 2013, the Firm filed a motion to dismiss the complaint, which was granted in part and denied in part on November 24, 2014. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $240 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On December 30, 2013, Wilmington Trust Company, in its capacity as trustee for Morgan Stanley Mortgage Loan Trust 2007-12, filed a complaint against the Firm styled Wilmington Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC et al., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $516 million, breached various representations and warranties. The complaint seeks, among other relief, unspecified damages, attorneys’ fees, interest and costs. On February 28, 2014, the defendants filed a motion to dismiss the complaint, which was granted in part and denied in part on June 14, 2016. On July 11, 2017, the Appellate Division affirmed in part and reversed in part the trial court’s order that granted in part the Firm’s motion to dismiss. On September 26, 2017, the Appellate Division denied plaintiff’s motion for leave to appeal to the New York Court of Appeals. Based on currently available information, the Firm believes

that it could incur a loss in this action of up to approximately $152 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus attorney’s fees, costs and interest, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On September 19, 2014, Financial Guaranty Insurance Company (“FGIC”) filed a complaint against the Firm in the Supreme Court of NY, styled Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. relating to a securitization issued by Basket of Aggregated Residential NIMS 2007-1 Ltd. The complaint asserts claims for breach of contract and alleges, among other things, that the net interest margin securities (“NIMS”) in the trust breached various representations and warranties. FGIC issued a financial guaranty policy with respect to certain notes that had an original balance of approximately $475 million. The complaint seeks, among other relief, specific performance of the NIMS breach remedy procedures in the transaction documents, unspecified damages, reimbursement of certain payments made pursuant to the transaction documents, attorneys’ fees and interest. On November 24, 2014, the Firm filed a motion to dismiss the complaint, which the court denied on January 19, 2017. On February 24, 2017, the Firm filed a notice of appeal of the denial of its motion to dismiss the complaint and perfected its appeal on November 22, 2017. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $126 million, the unpaid balance of these notes, plus pre- and post-judgment interest, fees and costs, as well as claim payments that FGIC has made and will make in the future.

On September 23, 2014, FGIC filed a complaint against the Firm in the Supreme Court of NY styled Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. relating to the Morgan Stanley ABS Capital I Inc. Trust 2007-NC4. The complaint asserts claims for breach of contract and fraudulent inducement and alleges, among other things, that the loans in the trust breached various representations and warranties and defendants made untrue statements and material omissions to induce FGIC to issue a financial guaranty policy on certain classes of certificates that had an original balance of approximately $876 million. The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, compensatory, consequential and punitive damages, attorneys’ fees and interest. On January 23, 2017, the court denied the Firm’s motion to dismiss the complaint. On February 24, 2017, the Firm filed a notice of appeal of the court’s order and perfected its appeal on November 22, 2017. Based on currently available information, the Firm believes

71 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

that it could incur a loss in this action of up to approximately $277 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands from a certificate holder and FGIC that the Firm did not repurchase, plus pre- and post-judgment interest, fees and costs, as well as claim payments that FGIC has made and will make in the future. In addition, plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On January 23, 2015, Deutsche Bank National Trust Company, in its capacity as trustee, filed a complaint against the Firm styled Deutsche Bank National Trust Company solely in its capacity as Trustee of the Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 v. Morgan Stanley Mortgage Capital Holdings LLC as Successor-by-Merger to Morgan Stanley Mortgage Capital Inc., and Morgan Stanley ABS Capital I Inc., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $1.05 billion, breached various representations and warranties. The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, compensatory, consequential, rescissory, equitable and punitive damages, attorneys’ fees, costs and other related expenses, and interest. On December 11, 2015, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. On February 11, 2016, plaintiff filed a notice of appeal of that order, and the appeal was fully briefed on August 19, 2016. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $277 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands from a certificate holder and a monoline insurer that the Firm did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

In matters styled Case number 15/3637 and Case number 15/4353, the Dutch Tax Authority (“Dutch Authority”) is challenging, in the District Court in Amsterdam, the prior set-off by the Firm of approximately €124 million (approximately $152 million) plus accrued interest of withholding tax credits against the Firm’s corporation tax liabilities for the tax years 2007 to 2013. The Dutch Authority alleges that the Firm was not entitled to receive the withholding tax credits on the basis, inter alia, that a Firm subsidiary did not hold legal title to certain securities subject to withholding tax on the relevant dates. The Dutch Authority has also alleged that the Firm failed to provide certain information to the Dutch Authority and keep adequate books

and records. A hearing took place in this matter on September 19, 2017. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately €124 million (approximately $152 million) plus accrued interest. On April 26, 2018, the District Court in Amsterdam issued a decision in matters styled Case number 15/3637 and Case number 15/4353 dismissing the Dutch Authority’s claims. The Dutch Authority has until June 7, 2018 to file any appeal.

12. Variable Interest Entities and Securitization Activities

Overview

For a discussion of the Firm’s VIEs, the determination and structure of VIEs and securitization activities, see Note 13 to the financial statements in the 2017 Form 10-K.

Consolidated VIEs

Assets and Liabilities by Type of Activity
	At March 31, 2018				At December 31, 2017
$ in millions	VIE Assets		VIE Liabilities		VIE Assets		VIE Liabilities
OSF	$	361	$	1	$	378	$	3
MABS1		234		197		249		210
Other2		2,718		1,131		1,174		250
Total	$	3,313	$	1,329	$	1,801	$	463

OSF—Other structured financings

1. Amounts include transactions backed by residential mortgage loans, commercial mortgage loans and other types of assets, including consumer or commercial assets. The value of assets is determined based on the fair value of the liabilities and the interests owned by the Firm in such VIEs as the fair values for the liabilities and interests owned are more observable.

2. Other primarily includes investment funds, certain operating entities, CLOs and structured transactions. At March 31, 2018, Other includes the consolidation of a fund managed by Mesa West Capital, LLC, which was acquired in the current quarter.

March 2018 Form 10-Q 72

Notes to Consolidated Financial Statements (Unaudited)

Assets and Liabilities by Balance Sheet Caption

	At March 31,		At December 31,
$ in millions	2018		2017
Assets
Cash and cash equivalents:
Cash and due from banks	$	103	$	69
Restricted cash		223		222
Trading assets at fair value		2,345		833
Customer and other receivables		21		19
Goodwill		18		18
Intangible assets		149		155
Other assets		454		485
Total	$	3,313	$	1,801
Liabilities
Other secured financings	$	1,305	$	438
Other liabilities and accrued expenses		24		25
Total	$	1,329	$	463

Consolidated VIE assets and liabilities are presented in the previous tables after intercompany eliminations. Most assets owned by consolidated VIEs cannot be removed unilaterally by the Firm and are not generally available to the Firm. Most related liabilities issued by consolidated VIEs are non-recourse to the Firm. In certain other consolidated VIEs, the Firm either has the unilateral right to remove assets or provides additional recourse through derivatives such as total return swaps, guarantees or other forms of involvement.

In general, the Firm’s exposure to loss in consolidated VIEs is limited to losses that would be absorbed on the VIE net assets recognized in its financial statements, net of amounts absorbed by third-party variable interest holders.

Select Information Related to Consolidated VIEs

	At March 31,		At December 31,
$ in millions	2018		2017
Noncontrolling interests	$	494	$	189

Non-consolidated VIEs

The following tables include non-consolidated VIEs in which the Firm has determined that its maximum exposure to loss is greater than specific thresholds or meets certain other criteria and exclude exposure to loss from liabilities due to immateriality. Most of the VIEs included in the following tables are sponsored by unrelated parties; the Firm’s involvement generally is the result of its secondary market-making activities, securities held in its Investment securities portfolio (see Note 5) and certain investments in funds.

Non-consolidated VIEs
	At March 31, 2018
$ in millions	MABS		CDO		MTOB		OSF		Other
VIE assets (UPB)	$	76,854	$	14,445	$	5,439	$	3,307	$	19,959
Maximum exposure to loss
Debt and equity interests	$	9,075	$	2,163	$	81	$	1,589	$	4,654
Derivative and other contracts		—		—		3,367		—		2,317
Commitments, guarantees and other		882		902		—		161		327
Total	$	9,957	$	3,065	$	3,448	$	1,750	$	7,298
Carrying value of exposure to loss—Assets
Debt and equity interests	$	9,075	$	2,163	$	51	$	1,185	$	4,654
Derivative and other contracts		—		—		5		—		111
Total	$	9,075	$	2,163	$	56	$	1,185	$	4,765

	At December 31, 2017
$ in millions	MABS		CDO		MTOB		OSF		Other
VIE assets (UPB)	$	89,288	$	9,807	$	5,306	$	3,322	$	31,934
Maximum exposure to loss
Debt and equity interests	$	10,657	$	1,384	$	80	$	1,628	$	4,730
Derivative and other contracts		—		—		3,333		—		1,686
Commitments, guarantees and other		1,214		668		—		164		433
Total	$	11,871	$	2,052	$	3,413	$	1,792	$	6,849
Carrying value of exposure to loss—Assets
Debt and equity interests	$	10,657	$	1,384	$	43	$	1,202	$	4,730
Derivative and other contracts		—		—		5		—		184
Total	$	10,657	$	1,384	$	48	$	1,202	$	4,914

MTOB—Municipal tender option bonds

73 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

The Firm’s maximum exposure to loss presented in the previous table often differs from the carrying value of the variable interests held by the Firm. The maximum exposure to loss presented in the previous table is dependent on the nature of the Firm’s variable interest in the VIE and is limited to the notional amounts of certain liquidity facilities, other credit support, total return swaps, written put options, and the fair value of certain other derivatives and investments the Firm has made in the VIE. Liabilities issued by VIEs generally are non-recourse to the Firm. Where notional amounts are utilized in quantifying the maximum exposure related to derivatives, such amounts do not reflect fair value write-downs already recorded by the Firm.

The Firm’s maximum exposure to loss presented in the previous table does not include the offsetting benefit of any financial instruments that the Firm may utilize to hedge these risks associated with its variable interests. In addition, the Firm’s maximum exposure to loss presented in the previous table is not reduced by the amount of collateral held as part of a transaction with the VIE or any party to the VIE directly against a specific exposure to loss.

Non-consolidated VIEs Mortgage- and Asset-Backed Securitization Assets

	At March 31, 2018				At December 31, 2017
$ in millions	UPB		Debt and Equity Interests		UPB		Debt and Equity Interests
Residential mortgages	$	13,564	$	782	$	15,636	$	1,272
Commercial mortgages		35,886		1,934		46,464		2,331
U.S. agency collateralized mortgage obligations		14,405		3,150		16,223		3,439
Other consumer or commercial loans		12,999		3,209		10,965		3,615
Total	$	76,854	$	9,075	$	89,288	$	10,657

Securitization transactions generally involve VIEs. Primarily as a result of its secondary market-making activities, the Firm owned additional VIE assets mainly issued by securitization SPEs for which the maximum exposure to loss is less than specific thresholds.

Additional VIE Assets Owned

$ in millions	At March 31, 2018		At December 31, 2017
VIE assets	$	12,314	$	11,318

These assets were either retained in connection with transfers of assets by the Firm, acquired in connection with secondary market-making activities, held as AFS securities in its Investment securities portfolio (see Note 5), or held as investments in funds. At March 31, 2018 and December 31, 2017, these assets consisted of securities backed by residential mortgage loans, commercial mortgage loans or other consumer loans, such as credit card receivables, automobile loans and student loans, CDOs or CLOs, and investment funds.

The Firm’s primary risk exposure is to the securities issued by the SPEs owned by the Firm, with the highest risk on the most subordinate class of beneficial interests. These assets generally are included in Trading assets—Corporate and other debt, Trading assets—Investments or AFS securities within its Investment securities portfolio and are measured at fair value (see Note 3). The Firm does not provide additional support in these transactions through contractual facilities, such as liquidity facilities, guarantees or similar derivatives. The Firm’s maximum exposure to loss generally equals the fair value of the assets owned.

Transactions with SPEs in which the Firm, acting as principal, transferred financial assets with continuing involvement and received sales treatment are shown in the following tables.

Transfers of Assets with Continuing Involvement

		At March 31, 2018
$ in millions	RML		CML		U.S. Agency CMO		CLN and Other1
SPE assets (UPB)2	$	14,978	$	59,607	$	14,751	$	16,823
Retained interests
Investment grade	$	—	$	324	$	825	$	5
Non-investment grade (fair value)		1		107		—		308
Total	$	1	$	431	$	825	$	313
Interests purchased in the secondary market (fair value)
Investment grade	$	—	$	112	$	71	$	—
Non-investment grade		16		57		—		15
Total	$	16	$	169	$	71	$	15
Derivative assets (fair value)	$	—	$	—	$	—	$	191
Derivative liabilities (fair value)		—		—		—		119

March 2018 Form 10-Q 74

Notes to Consolidated Financial Statements (Unaudited)

		At December 31, 2017
$ in millions	RML		CML		U.S. Agency CMO		CLN and Other1
SPE assets(UPB)2	$	15,555	$	62,744	$	11,612	$	17,060
Retained interests
Investment grade	$	—	$	293	$	407	$	4
Non-investment grade (fair value)		1		98		—		478
Total	$	1	$	391	$	407	$	482
Interests purchased in the secondary market (fair value)
Investment grade	$	—	$	94	$	439	$	—
Non-investment grade		16		66		—		4
Total	$	16	$	160	$	439	$	4
Derivative assets (fair value)	$	1	$	—	$	—	$	226
Derivative liabilities (fair value)		—		—		—		85

RML—Residential mortgage loans

CML—Commercial mortgage loans

1. Amounts include CLO transactions managed by unrelated third parties.

2. Amounts include assets transferred by unrelated transferors.

		Fair Value at March 31, 2018
$ in millions	Level 2		Level 3		Total
Retained interests
Investment grade	$	831	$	5	$	836
Non-investment grade		13		403		416
Total	$	844	$	408	$	1,252
Interests purchased in the secondary market
Investment grade	$	182	$	1	$	183
Non-investment grade		52		36		88
Total	$	234	$	37	$	271
Derivative assets	$	50	$	141	$	191
Derivative liabilities		114		5		119
		Fair Value at December 31, 2017
$ in millions	Level 2		Level 3		Total
Retained interests
Investment grade	$	407	$	4	$	411
Non-investment grade		22		555		577
Total	$	429	$	559	$	988
Interests purchased in the secondary market
Investment grade	$	531	$	2	$	533
Non-investment grade		57		29		86
Total	$	588	$	31	$	619
Derivative assets	$	78	$	149	$	227
Derivative liabilities		81		4		85

Transferred assets are carried at fair value prior to securitization, and any changes in fair value are recognized in the income statements. The Firm may act as underwriter of the beneficial interests issued by these securitization vehicles. Investment banking underwriting net revenues are recognized in connection with these transactions. The Firm may retain interests in the securitized financial assets as one or more tranches of the securitization. These retained interests are generally carried at fair value in the balance sheets with changes in fair value recognized in the income statements.

Proceeds from New Securitization Transactions and Sales of Loans

	Three Months Ended March 31,
$ in millions	2018		2017
New transactions1	$	6,134	$	5,997
Retained interests		481		430
Sales of corporate loans to CLO SPEs1, 2		94		179

1. Net gains on new transactions and sales of corporate loans to CLO entities at the time of the sale were not material for all periods presented.

2. Sponsored by non-affiliates.

The Firm has provided, or otherwise agreed to be responsible for, representations and warranties regarding certain assets transferred in securitization transactions sponsored by the Firm (see Note 11).

The Firm also enters into transactions in which it sells equity securities and contemporaneously enters into bilateral OTC equity derivatives with the purchasers of the securities, through which it retains the exposure to the securities as shown in the following table.

Assets Sold with Retained Exposure

$ in millions	At March 31, 2018		At December 31, 2017
Carrying value of assets derecognized at the time of sale and gross cash proceeds	$	26,800	$	19,115
Fair value
Assets sold	$	26,566	$	19,138
Derivative assets recognized in the balance sheets		2		176
Derivative liabilities recognized in the balance sheets		236		153

Failed Sales

For transfers that fail to meet the accounting criteria for a sale, the Firm continues to recognize the assets in Trading assets at fair value, and the Firm recognizes the associated liabilities in Other secured financings at fair value in the balance sheets (see Note 10).

The assets transferred to certain unconsolidated VIEs in transactions accounted for as failed sales cannot be removed unilaterally by the Firm and are not generally available to the Firm. The related liabilities are also non-recourse to the Firm. In certain other failed sale transactions, the Firm has the right to remove assets or provides additional recourse through derivatives such as total return swaps, guarantees or other forms of involvement.

Carrying Value of Assets and Liabilities Related to Failed Sales

	At March 31, 2018				At December 31, 2017
$ in millions	Assets		Liabilities		Assets		Liabilities
Failed sales	$	710	$	710	$	552	$	552

75 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

13. Regulatory Requirements

Regulatory Capital Framework and Requirements

For a discussion of the Firm’s regulatory capital framework, see Note 14 to the financial statements in the 2017 Form 10-K.

The Firm is required to maintain minimum risk-based and leverage capital ratios under the regulatory capital requirements. A summary of the calculations of regulatory capital, RWA and transition provisions follows.

The Firm’s risk-based capital ratios for purposes of determining regulatory compliance are the lower of the capital ratios computed under (i) the standardized approaches for calculating credit risk and market risk RWA (“Standardized Approach”) and (ii) the applicable advanced approaches for calculating credit risk, market risk and operational risk RWA (“Advanced Approach”).

Minimum risk-based capital ratio requirements apply to Common Equity Tier 1 capital, Tier 1 capital and Total capital (which includes Tier 2 capital). Certain adjustments to and deductions from capital are required for purposes of determining these ratios, such as goodwill, intangible assets, certain deferred tax assets, other amounts in AOCI and investments in the capital instruments of unconsolidated financial institutions.

In addition to the minimum risk-based capital ratio requirements, by 2019 the Firm will be subject to the following buffers:

• A greater than 2.5% Common Equity Tier 1 capital conservation buffer;

• The Common Equity Tier 1 G-SIB capital surcharge, currently at 3%; and

• Up to a 2.5% Common Equity Tier 1 CCyB, currently set by U.S. banking agencies at zero.

In 2017 and 2018, each of the buffers is 50% and 75%, respectively, of the 2019 requirement noted above. Failure to maintain the buffers will result in restrictions on the Firm’s ability to make capital distributions, including the payment of dividends and the repurchase of stock, and to pay discretionary bonuses to executive officers.

For a further discussion of the Firm’s calculation of risk-based capital ratios, see Note 14 to the financial statements in the 2017 Form 10-K.

The Firm’s Regulatory Capital and Capital Ratios

At March 31, 2018 and December 31, 2017, the Firm’s ratios are based on the Standardized Approach rules.

Regulatory Capital

		At March 31, 2018
$ in millions	Amount		Ratio		Required Ratio1
Common Equity Tier 1 capital	$	60,568		15.5%		8.6%
Tier 1 capital		69,213		17.7%		10.1%
Total capital		79,363		20.3%		12.1%
Total RWA		390,390		N/A		N/A
Tier 1 leverage		69,213		8.2%		4.0%
Adjusted average assets2		846,868		N/A		N/A
SLR3		69,213		6.3%		5.0%
Supplementary leverage exposure		1,091,518		N/A		N/A
		At December 31, 2017
$ in millions	Amount		Ratio		Required Ratio1
Common Equity Tier 1 capital	$	61,134		16.5%		7.3%
Tier 1 capital		69,938		18.9%		8.8%
Total capital		80,275		21.7%		10.8%
Total RWA		369,578		N/A		N/A
Tier 1 leverage		69,938		8.3%		4.0%
Adjusted average assets2		842,270		N/A		N/A

1. Percentages represent minimum required regulatory capital ratios under the transitional rules. Regulatory compliance was determined based on capital ratios calculated under the transitional rules until December 31, 2017.

2. Adjusted average assets represent the denominator of the Tier 1 leverage ratio and are composed of the average daily balance of consolidated on-balance sheet assets under U.S. GAAP during the current quarter and the quarter ended December 31, 2017, respectively, adjusted for disallowed goodwill, intangible assets, certain deferred tax assets, certain investments in the capital instruments of unconsolidated financial institutions and other adjustments

3. The SLR became effective as a capital standard on January 1, 2018.

U.S. Bank Subsidiaries’ Regulatory Capital and Capital Ratios

The Firm’s U.S. Bank Subsidiaries are subject to similar regulatory capital requirements as the Firm. Failure to meet minimum capital requirements can initiate certain mandatory and discretionary actions by regulators that, if undertaken, could have a direct material effect on the U.S. Bank Subsidiaries’ and the Firm’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, each of the U.S. Bank Subsidiaries must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.

March 2018 Form 10-Q 76

Notes to Consolidated Financial Statements (Unaudited)

Each U.S. depository institution subsidiary of the Firm must be well-capitalized in order for the Firm to continue to qualify as a financial holding company and to continue to engage in the broadest range of financial activities permitted for financial holding companies. Under regulatory capital requirements adopted by the U.S. federal banking agencies, U.S. depository institutions must maintain certain minimum capital ratios in order to be considered well-capitalized. At March 31, 2018 and December 31, 2017, the Firm’s U.S. Bank Subsidiaries maintained capital at levels sufficiently in excess of the universally mandated well-capitalized requirements to address any additional capital needs and requirements identified by the U.S. federal banking regulators.

At March 31, 2018 and December 31, 2017, the U.S. Bank Subsidiaries’ ratios are based on the Standardized Approach rules.

MSBNA’s Regulatory Capital

		At March 31, 2018
$ in millions	Amount		Ratio		Required   Ratio1
Common Equity Tier 1 capital	$	15,514		19.7%		6.5%
Tier 1 capital		15,514		19.7%		8.0%
Total capital		15,785		20.1%		10.0%
Tier 1 leverage		15,514		11.8%		5.0%
SLR2				9.0%		6.0%
		At December 31, 2017
$ in millions	Amount		Ratio		Required   Ratio1
Common Equity Tier 1 capital	$	15,196		20.5%		6.5%
Tier 1 capital		15,196		20.5%		8.0%
Total capital		15,454		20.8%		10.0%
Tier 1 leverage		15,196		11.8%		5.0%
MSPBNA’s Regulatory Capital
		At March 31, 2018
$ in millions	Amount		Ratio		Required   Ratio1
Common Equity Tier 1 capital	$	6,382		24.2%		6.5%
Tier 1 capital		6,382		24.2%		8.0%
Total capital		6,425		24.4%		10.0%
Tier 1 leverage		6,382		9.7%		5.0%
SLR2				9.3%		6.0%
		At December 31, 2017
$ in millions	Amount		Ratio		Required   Ratio1
Common Equity Tier 1 capital	$	6,215		24.4%		6.5%
Tier 1 capital		6,215		24.4%		8.0%
Total capital		6,258		24.6%		10.0%
Tier 1 leverage		6,215		9.7%		5.0%

1. Ratios that are required in order to be considered well-capitalized for U.S. regulatory purposes. Regulatory compliance was determined based on capital ratios calculated under the transitional rules until December 31, 2017.

2. The SLR became effective as a capital standard on January 1, 2018.

U.S. Broker-Dealer Regulatory Capital Requirements

MS&Co. Regulatory Capital

$ in millions	At March 31, 2018		At December 31, 2017
Net capital	$	12,661	$	10,142
Excess net capital		10,303		8,018

MS&Co. is a registered U.S. broker-dealer and registered futures commission merchant and, accordingly, is subject to the minimum net capital requirements of the SEC and the CFTC. MS&Co. has consistently operated with capital in excess of its regulatory capital requirements.

As an Alternative Net Capital broker-dealer, and in accordance with the market and credit risk standards of Appendix E of SEC Rule 15c3-1, MS&Co. is subject to minimum net capital and tentative net capital requirements. In addition, MS&Co. must notify the SEC if its tentative net capital falls below certain levels. At March 31, 2018 and December 31, 2017, MS&Co. has exceeded its net capital requirement and has tentative net capital in excess of the minimum and notification requirements.

MSSB LLC Regulatory Capital

$ in millions	At March 31, 2018		At December 31, 2017
Net capital	$	2,919	$	2,567
Excess net capital		2,759		2,400

MSSB LLC is a registered U.S. broker-dealer and introducing broker for the futures business and, accordingly, is subject to the minimum net capital requirements of the SEC. MSSB LLC has consistently operated with capital in excess of its regulatory capital requirements.

Other Regulated Subsidiaries

MSIP, a London-based broker-dealer subsidiary, is subject to the capital requirements of the PRA, and MSMS, a Tokyo-based broker-dealer subsidiary, is subject to the capital requirements of the Financial Services Agency. MSIP and MSMS have consistently operated with capital in excess of their respective regulatory capital requirements.

Certain other U.S. and non-U.S. subsidiaries of the Firm are subject to various securities, commodities and banking regulations, and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. These subsidiaries have consistently operated with capital in excess of their local capital adequacy requirements.

77 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

14. Total Equity

Share Repurchases

	Three Months Ended March 31,
$ in millions	2018		2017
Repurchases of common stock under the Firm’s share repurchase program	$	1,250	$	750

The Firm’s 2017 Capital Plan (“Capital Plan”) includes the share repurchase of up to $5.0 billion of outstanding common stock for the period beginning July 1, 2017 through June 30, 2018, an increase from $3.5 billion in the 2016 Capital Plan. Additionally, the Capital Plan includes quarterly common stock dividends of up to $0.25 per share.

Preferred Stock

	Three Months Ended March 31,
$ in millions	2018		2017
Dividends declared	$	93	$	90

For a description of Series A through Series K preferred stock issuances, see Note 15 to the financial statements in the 2017 Form 10-K. The Firm is authorized to issue 30 million shares of preferred stock. The preferred stock has a preference over the common stock upon liquidation. The Firm’s preferred stock qualifies as Tier 1 capital in accordance with regulatory capital requirements (see Note 13).

Preferred Stock Outstanding

	Shares Outstanding				Carrying Value
$ in millions, except per share data	At March 31, 2018		Liquidation Preference per Share		At March 31, 2018		At December 31, 2017
Series
A		44,000	$	25,000	$	1,100	$	1,100
C1		519,882		1,000		408		408
E		34,500		25,000		862		862
F		34,000		25,000		850		850
G		20,000		25,000		500		500
H		52,000		25,000		1,300		1,300
I		40,000		25,000		1,000		1,000
J		60,000		25,000		1,500		1,500
K		40,000		25,000		1,000		1,000
Total					$	8,520	$	8,520

1. Series C is composed of the issuance of 1,160,791 shares of Series C Preferred Stock to MUFG for an aggregate purchase price of $911 million, less the redemption of 640,909 shares of Series C Preferred Stock of $503 million, which were converted to common shares of approximately $705 million.

Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)¹

$ in millions	Foreign Currency Translation Adjustments			AFS Securities			Pension, Postretirement and Other			DVA			Total
December 31, 2017	$	(767	)	$	(547	)	$	(591	)	$	(1,155	)	$	(3,060	)
Cumulative adjustment for accounting changes2		(8	)		(111	)		(124	)		(194	)		(437	)
OCI during the period		60			(410	)		5			436			91
March 31, 2018	$	(715	)	$	(1,068	)	$	(710	)	$	(913	)	$	(3,406	)
December 31, 2016	$	(986	)	$	(588	)	$	(474	)	$	(595	)	$	(2,643	)
OCI during the period		107			84			—			2			193
March 31, 2017	$	(879	)	$	(504	)	$	(474	)	$	(593	)	$	(2,450	)

1. Amounts net of tax and noncontrolling interests.

2. The cumulative adjustment for accounting changes is primarily the effect of the adoption of the accounting update Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This adjustment was recorded as of January 1, 2018 to reclassify certain income tax effects related to enactment of the Tax Act from AOCI to Retained earnings, primarily related to the remeasurement of deferred tax assets and liabilities resulting from the reduction in corporate income tax rate to 21%. See Note 2 for further information.

March 2018 Form 10-Q 78

Notes to Consolidated Financial Statements (Unaudited)

Components of Period Changes in OCI

	Three Months Ended March 31, 20181
$ in millions	Pre-tax Gain (Loss)			Income Tax Benefit (Provision)			After- tax Gain (Loss)			Non- controlling Interests		Net
Foreign currency translation adjustments
OCI activity	$	78		$	39		$	117		$	57	$	60
Reclassified to earnings		—			—			—			—		—
Net OCI	$	78		$	39		$	117		$	57	$	60
Change in net unrealized gains (losses) on AFS securities
OCI activity	$	(535	)	$	125		$	(410	)	$	—	$	(410	)
Reclassified to earnings		—			—			—			—		—
Net OCI	$	(535	)	$	125		$	(410	)	$	—	$	(410	)
Pension, postretirement and other
OCI activity	$	—		$	—		$	—		$	—	$	—
Reclassified to earnings		6			(1	)		5			—		5
Net OCI	$	6		$	(1	)	$	5		$	—	$	5
Change in net DVA
OCI activity	$	580		$	(140	)	$	440		$	15	$	425
Reclassified to earnings		15			(4	)		11			—		11
Net OCI	$	595		$	(144	)	$	451		$	15	$	436
	Three Months Ended March 31, 2017
$ in millions	Pre-tax Gain (Loss)			Income Tax Benefit (Provision)			After- tax Gain (Loss)			Non- controlling Interests		Net
Foreign currency translation adjustments
OCI activity	$	43		$	107		$	150		$	43	$	107
Reclassified to earnings		—			—			—			—		—
Net OCI	$	43		$	107		$	150		$	43	$	107
Change in net unrealized gains (losses) on AFS securities
OCI activity	$	137		$	(52	)	$	85		$	—	$	85
Reclassified to earnings		(2	)		1			(1	)		—		(1	)
Net OCI	$	135		$	(51	)	$	84		$	—	$	84
Change in net DVA
OCI activity	$	7		$	(1	)	$	6		$	7	$	(1	)
Reclassified to earnings		4			(1	)		3			—		3
Net OCI	$	11		$	(2	)	$	9		$	7	$	2

1. Exclusive of 2018 cumulative adjustments related to the adoption of certain accounting updates in the current quarter. Refer to the table below and Note 2 for further information.

Cumulative Adjustments to Retained Earnings

$ in millions	Three Months Ended March 31, 2018
Revenue from contracts with customers	$	(32	)
Derivatives and hedging–targeted improvements to accounting for hedging activities		(99	)
Reclassification of certain tax effects from AOCI		443
Other1		(6	)
Total	$	306
$ in millions	Three Months Ended March 31, 2017
Improvements to employee share-based payment accounting2		(30	)
Intra-entity transfers of assets other than inventory		(5	)
Total	$	(35	)

1. Other includes the adoption of accounting updates related to Recognition and Measurement of Financial Assets and Financial Liabilities (other than the provision around presenting unrealized DVA in OCI which we early adopted in 2016) and Derecognition of Nonfinancial Assets. The impact of these adoptions on Retained earnings was not significant.

2. See Note 2 to the 2017 Form 10-K for further information.

Amounts in the previous table represent cumulative adjustments related to the adoption of the accounting updates during the current and prior year quarters. See Note 2 for further information.

79 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

15. Earnings per Common Share

Calculation of Basic and Diluted EPS

	Three Months Ended March 31,
in millions, except for per share data	2018			2017
Basic EPS
Income from continuing operations	$	2,706		$	1,993
Income (loss) from discontinued operations		(2	)		(22	)
Net income		2,704			1,971
Net income applicable to noncontrolling interests		36			41
Net income applicable to Morgan Stanley		2,668			1,930
Preferred stock dividends and other		93			90
Earnings applicable to Morgan Stanley common shareholders	$	2,575		$	1,840
Weighted average common shares outstanding		1,740			1,801
Earnings per basic common share
Income from continuing operations	$	1.48		$	1.03
Income (loss) from discontinued operations		—			(0.01	)
Earnings per basic common share	$	1.48		$	1.02
Diluted EPS
Earnings applicable to Morgan Stanley common shareholders	$	2,575		$	1,840
Weighted average common shares outstanding		1,740			1,801
Effect of dilutive securities: Stock options and RSUs1		31			41
Weighted average common shares outstanding and common stock equivalents		1,771			1,842
Earnings per diluted common share
Income from continuing operations	$	1.46		$	1.01
Income (loss) from discontinued operations		(0.01	)		(0.01	)
Earnings per diluted common share	$	1.45		$	1.00
Weighted average antidilutive RSUs and stock options (excluded from the computation of diluted EPS)1		1			—

1. RSUs that are considered participating securities are treated as a separate class of securities in the computation of basic EPS, and, therefore, such RSUs are not included as incremental shares in the diluted EPS computation.

16. Interest Income and Interest Expense

Interest income and Interest expense are classified in the income statements based on the nature of the instrument and related market conventions. When included as a component of the instrument’s fair value, interest is included within Trading revenues or Investments revenues. Otherwise, it is included within Interest income or Interest expense.

	Three Months Ended March 31,
$ in millions	2018		2017
Interest income
Investment securities	$	424	$	326
Loans		938		748
Securities purchased under agreements to resell and Securities borrowed1		215		(18	)
Trading assets, net of Trading liabilities		540		463
Customer receivables and Other2		743		446
Total interest income	$	2,860	$	1,965
Interest expense
Deposits	$	159	$	11
Borrowings		1,138		1,022
Securities sold under agreements to repurchase and Securities loaned3		402		248
Customer payables and Other4		186		(87	)
Total interest expense	$	1,885	$	1,194
Net interest	$	975	$	771

1. Includes fees paid on Securities borrowed.

2. Includes interest from Customer receivables, Restricted cash and Interest bearing deposits with banks.

3. Includes fees received on Securities loaned.

4. Includes fees received from prime brokerage customers for stock loan transactions incurred to cover customers’ short positions.

17. Employee Benefit Plans

The Firm sponsors various retirement plans for the majority of its U.S. employees. The Firm provides certain other postretirement benefits, primarily health care and life insurance, to eligible U.S. employees.

Components of Net Periodic Benefit Expense (Income) for Pension and Other Postretirement Plans

	Three Months Ended March 31,
$ in millions	2018			2017
Service cost, benefits earned during the period	$	4		$	4
Interest cost on projected benefit obligation		34			37
Expected return on plan assets		(28	)		(29	)
Net amortization of prior service credit		—			(4	)
Net amortization of actuarial loss		6			4
Net periodic benefit expense (income)	$	16		$	12

March 2018 Form 10-Q 80

Notes to Consolidated Financial Statements (Unaudited)

18. Income Taxes

The Firm is under continuous examination by the IRS and other tax authorities in certain countries, such as Japan and the U.K., and in states in which it has significant business operations, such as New York. The Firm has established a liability for unrecognized tax benefits, and associated interest, if applicable (“tax liabilities”), that it believes is adequate in relation to the potential for additional assessments. Once established, the Firm adjusts such tax liabilities only when new information is available or when an event occurs necessitating a change.

During the fourth quarter of 2017, the Firm agreed to proposed adjustments associated with the expected closure of the IRS field audits for tax years 2006-2008. The Firm expects final closure of these tax years in the second quarter of 2018. The Firm is currently at various levels of field examination with respect to audits by the IRS, as well as New York State and New York City, for tax years 2009-2012 and 2007-2014, respectively.

The Firm believes that the resolution of the above tax matters will not have a material effect on the annual financial statements, although a resolution could have a material impact in the income statements and effective tax rate for any period in which such resolution occurs.

Furthermore, by the end of the first quarter of 2018, the Firm reached a conclusion with the U.K. tax authorities on certain issues through tax year 2010, the resolution of which did not have a material impact on the annual financial statements or effective tax rate.

See Note 11 regarding the Dutch Tax Authority’s challenge, in the District Court in Amsterdam (matters styled Case number 15/3637 and Case number 15/4353), of the Firm’s entitlement to certain withholding tax credits which may impact the balance of unrecognized tax benefits.

It is reasonably possible that significant changes in the balance of unrecognized tax benefits occur within the next 12 months. At this time, however, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits and the impact on the Firm’s effective tax rate over the next 12 months.

19. Segment and Geographic Information

Segment Information

For a discussion about the Firm’s business segments, see Note 21 to the financial statements in the 2017 Form 10-K.

Selected Financial Information by Business Segment

		Three Months Ended March 31, 2018
$ in millions	IS			WM		IM		I/E			Total
Total non-interest revenues	$	6,195		$	3,305	$	718	$	(116	)	$	10,102
Interest income		1,804			1,280		1		(225	)		2,860
Interest expense		1,899			211		1		(226	)		1,885
Net interest		(95	)		1,069		—		1			975
Net revenues	$	6,100		$	4,374	$	718	$	(115	)	$	11,077
Income from continuing operations before income taxes	$	2,112		$	1,160	$	148	$	—		$	3,420
Provision for income taxes		449			246		19		—			714
Income from continuing operations		1,663			914		129		—			2,706
Income (loss) from discontinued operations, net of income taxes		(2	)		—		—		—			(2	)
Net income		1,661			914		129		—			2,704
Net income applicable to noncontrolling interests		34			—		2		—			36
Net income applicable to Morgan Stanley	$	1,627		$	914	$	127	$	—		$	2,668
		Three Months Ended March 31, 2017
$ in millions	IS			WM		IM		I/E			Total
Total non-interest revenues	$	5,379		$	3,064	$	608	$	(77	)	$	8,974
Interest income		1,124			1,079		1		(239	)		1,965
Interest expense		1,351			85		—		(242	)		1,194
Net interest		(227	)		994		1		3			771
Net revenues	$	5,152		$	4,058	$	609	$	(74	)	$	9,745
Income from continuing operations before income taxes	$	1,730		$	973	$	103	$	2		$	2,808
Provision for income taxes		459			326		30		—			815
Income from continuing operations		1,271			647		73		2			1,993
Income (loss) from discontinued operations, net of income taxes		(22	)		—		—		—			(22	)
Net income		1,249			647		73		2			1,971
Net income applicable to noncontrolling interests		35			—		6		—			41
Net income applicable to Morgan Stanley	$	1,214		$	647	$	67	$	2		$	1,930

I/E–Intersegment Eliminations

81 March 2018 Form 10-Q

Notes to Consolidated Financial Statements (Unaudited)

Total Assets by Business Segment

$ in millions	At March 31, 2018		At December 31, 2017
Institutional Securities	$	674,785	$	664,974
Wealth Management		177,603		182,009
Investment Management		6,107		4,750
Total1	$	858,495	$	851,733

1. Parent assets have been fully allocated to the business segments.

Additional Information – Investment Management

Net Unrealized Performance-based Fees

$ in millions	At March 31, 2018		At December 31, 2017
Net cumulative unrealized performance-based fees at risk of reversing	$	441	$	442

The Firm’s portion of net cumulative unrealized performance-based fees (for which the Firm is not obligated to pay compensation) are at risk of reversing if the fund performance falls below the stated investment management agreement benchmarks. See Note 11 for information regarding general partner guarantees, which include potential obligations to return performance fee distributions previously received.

Reduction of Fees due to Fee Waivers

	Three Months Ended March 31,
$ in millions	2018		2017
Fee waivers	$	18	$	23

The Firm waives a portion of its fees in the Investment Management business segment from certain registered money market funds that comply with the requirements of Rule 2a-7 of the Investment Company Act of 1940.

Geographic Information

For a discussion about the Firm’s geographic net revenues, see Note 21 to the financial statements in the 2017 Form 10-K.

Net Revenues by Region

	Three Months Ended March 31,
$ in millions	2018		2017
Americas	$	8,018	$	7,088
EMEA		1,708		1,489
Asia		1,351		1,168
Total	$	11,077	$	9,745

20. Revenues from Contracts with Customers

These disclosures are made in accordance with the adoption of the accounting update Revenue from Contracts with Customers, as such, they relate only to the subset of revenues generated from contracts with customers, which excludes certain revenues primarily reflected in Trading and Interest income.

For a detailed discussion about the Firm’s revenue recognition accounting policies, see Note 2. For further segment and geographic information of the Firm’s total revenues, see Note 19. For a discussion about the Firm’s business segments, see Note 21 to the financial statements in the 2017 Form 10-K.

Customer Contract Revenue by Business Segment

		Three Months Ended March 31, 2018
$ in millions	IS		WM		IM		I/E			Total
Investment banking1	$	1,308	$	140	$	—	$	(19	)	$	1,429
Commissions and fees		744		498		—		(69	)		1,173
Asset management		110		2,495		626		(39	)		3,192
Other customer contract revenues2		59		59		—		(2	)		116
Total revenues from contracts with customers3	$	2,221	$	3,192	$	626	$	(129	)	$	5,910

1. Investment banking includes revenues from underwriting equity and fixed income securities and advisory fees.

2. Includes Trading and Other revenues from contracts with customers.

3. Includes $902 million in total consolidated revenue recognized in the current quarter from services performed over multiple periods related primarily to investment banking advisory fees, and distribution fees.

Customer Contract Revenue by Region

$ in millions	Three Months Ended March 31, 2018
Americas	$	4,738
EMEA		622
Asia		550
Total	$	5,910

Change in Revenue as a Result of Application of the New Revenue Recognition Standard¹

$ in millions	Three Months Ended March 31, 2018
Investment banking2	$	60
Commissions and fees		2
Asset management		9
Other customer contract revenues		12
Total change	$	83

1. The accounting update requires, among other things, a gross presentation of certain costs that were previously netted against revenues. As a result, the Firm recorded an increase to net revenues and noncompensation expenses of $79 million, which was reported as follows: $72 million in the Institutional Securities business segment; $23 million in the Investment. Management business segment; and $(16) million in Intersegment Eliminations related to intersegment activity.

2. The effect of changing to a gross presentation on advisory fees and total underwriting fees within the Institutional Securities business segment in the current quarter was $15 million and $45 million, respectively.

March 2018 Form 10-Q 82

Notes to Consolidated Financial Statements (Unaudited)

Balance Sheet Amounts Related to Customer Contracts Revenue

$ in millions	At March 31, 2018		At January 1, 2018
Customer and other receivables	$	2,697	$	2,805

Other Liabilities—Contract Liabilities Rollforward

$ in millions	Three Months Ended March 31, 2018
January 1, 2018	$	155
Recognized contract liabilities		184
Contract liabilities recognized into revenue		(160	)
March 31, 2018	$	179

Current quarter activity in contract liabilities relates primarily to Wealth Management advisory and managed account fees that are billed in advance and recognized into revenue as the underlying services are provided.

Certain Future Expected Revenues

		At March 31, 2018
$ in millions	2018		2019		2020		Thereafter		Total
Other customer contract revenues1	$	89	$	118	$	95	$	310	$	612

1. Primarily includes commodities-related contracts with customers.

The previous table presents expected revenues from current obligations to perform services in the future. It excludes the following: revenue subject to potentially significant reversal, revenues from contracts shorter than one year, and revenues from billings that are commensurate with the value of the services performed at each stage of the contract.

21. Subsequent Events

The Firm has evaluated subsequent events for adjustment to or disclosure in the financial statements through the date of this report and has not identified any recordable or disclosable events not otherwise reported in these financial statements or the notes thereto.

83 March 2018 Form 10-Q

Financial Data Supplement (Unaudited) Average Balances and Interest Rates and Net Interest Income

	Three Months Ended March 31,
	2018										2017
		Average						Annualized					Average						Annualized
		Daily						Average					Daily						Average
$ in millions		Balance			Interest			Rate					Balance			Interest			Rate
Interest earning assets1
Investment securities2	$		80,532	$		424			2.1	%		$		80,693	$		326			1.6	%
Loans2			104,407			938			3.6					95,364			748			3.2
Securities purchased under agreements to resell and Securities borrowed3:
U.S.			124,172			309			1.0					124,809			77			0.2
Non-U.S.			87,581			(94	)		(0.4	)				97,415			(95	)		(0.4	)
Trading assets, net of Trading liabilities4:
U.S.			53,488			487			3.7					54,498			445			3.3
Non-U.S.			5,059			53			4.2					3,201			18			2.3
Customer receivables and Other5:
U.S.			71,382			542			3.1					68,918			336			2.0
Non-U.S.			34,131			201			2.4					24,851			110			1.8
Total	$		560,752	$		2,860			2.1	%		$		549,749	$		1,965			1.4	%
Interest bearing liabilities1
Deposits2	$		159,948	$		159			0.4	%		$		153,674	$		11			—	%
Borrowings2, 6			194,558			1,138			2.4					171,000			1,022			2.4
Securities sold under agreements to repurchase and Securities loaned7:
U.S.			25,009			286			4.6					33,900			172			2.1
Non-U.S.			40,675			116			1.2					39,774			76			0.8
Customer payables and Other8:
U.S.			121,438			49			0.2					121,923			(86	)		(0.3	)
Non-U.S.			69,646			137			0.8					58,556			(1	)		—
Total	$		611,274	$		1,885			1.3	%		$		578,827	$		1,194			0.8	%
Net interest income and net interest rate spread				$		975			0.8	%					$		771			0.6	%

1. Prior period amounts have been revised to conform to the current presentation.

2. Amounts include primarily U.S. balances.

3. Includes fees paid on Securities borrowed.

4. Trading assets, net of Trading liabilities exclude non-interest earning assets and non-interest bearing liabilities, such as equity securities.

5. Includes interest from Customer receivables, Restricted cash and Interest bearing deposits with banks.

6. The Firm also issues structured notes that have coupon or repayment terms linked to the performance of debt or equity securities, indices, currencies or commodities, which are recorded within Trading revenues (see Note 3 to the financial statements).

7. Includes fees received on Securities loaned. The annualized average rate was calculated using (a) interest expense incurred on all securities sold under agreements to repurchase and securities loaned transactions, whether or not such transactions were reported in the balance sheets and (b) net average on-balance sheet balances, which exclude certain securities-for-securities transactions.

8. Includes fees received from prime brokerage customers for stock loan transactions incurred to cover customers’ short positions.

March 2018 Form 10-Q 84

Financial Data Supplement (Unaudited) Rate/Volume Analysis

Effect of Volume and Rate Changes on Net Interest Income

	Three Months Ended March 31, 2018 versus
	Three Months Ended March 31, 2017
	Increase (Decrease) Due to Change in:
$ in millions		Volume				Rate			Net Change
Interest earning assets
Investment securities	$		(1	)	$		99		$	98
Loans			71				119			190
Securities purchased under agreements to resell and Securities borrowed:
U.S.			—				232			232
Non-U.S.			10				(9	)		1
Trading assets, net of Trading liabilities:
U.S.			(8	)			50			42
Non-U.S.			10				25			35
Customer receivables and Other:
U.S.			12				194			206
Non-U.S.			41				50			91
Change in interest income	$		135		$		760		$	895
Interest bearing liabilities
Deposits	$		—		$		148		$	148
Borrowings			141				(25	)		116
Securities sold under agreements to repurchase and Securities loaned:
U.S.			(45	)			159			114
Non-U.S.			2				38			40
Customer payables and Other:
U.S.			—				135			135
Non-U.S.			—				138			138
Change in interest expense	$		98		$		593		$	691
Change in net interest income	$		37		$		167		$	204

85 March 2018 Form 10-Q

Glossary of Common Acronyms

2017 Form 10-K—Annual Report on Form 10-K for year ended December 31, 2017 filed with the SEC

ABS—Asset-backed securities

AFS—Available-for-sale

AML—Anti-money laundering

AOCI—Accumulated other comprehensive income (loss)

AUM—Assets under management or supervision

BHC—Bank holding company

bps—Basis points; one basis point equals 1/100th of 1%

CCAR—Comprehensive Capital Analysis and Review

CCyB—Countercyclical capital buffer

CDO—Collateralized debt obligations, including collateralized loan obligations

CDS—Credit default swaps

CECL—Current expected credit loss

CFTC—U.S. Commodity Futures Trading Commission

CLN—Credit-linked notes

CLO—Collateralized loan obligations

CMBS—Commercial mortgage-backed securities

CMO—Collateralized mortgage obligations

CVA—Credit valuation adjustment

DVA—Debt valuation adjustment

EBITDA—Earnings before interest, taxes, depreciation and amortization

ELN—Equity-linked notes

EMEA—Europe, Middle East and Africa

EPS—Earnings per common share

ERISA—Employee Retirement Income Security Act of 1974

E.U.—European Union

FDIC—Federal Deposit Insurance Corporation

FFELP—Family Education Loan Program

FVA—Funding valuation adjustment

GLR—Global liquidity reserve

G-SIB—Global systemically important banks

HQLA—High-quality liquid assets

HTM—Held-to-maturity

I/E—Intersegment eliminations

IM—Investment Management

IRS—Internal Revenue Service

IS—Institutional Securities

LCR—Liquidity coverage ratio, as adopted by the U.S. banking agencies

LIBOR—London Interbank Offered Rate

M&A—Merger, acquisition and restructuring transaction

MSBNA—Morgan Stanley Bank, N.A.

MS&Co.—Morgan Stanley & Co. LLC

MSIP—Morgan Stanley & Co. International plc

MSMS—Morgan Stanley MUFG Securities Co., Ltd.

MSPBNA—Morgan Stanley Private Bank, National Association

MSSB LLC—Morgan Stanley Smith Barney LLC

MUFG—Mitsubishi UFJ Financial Group, Inc.

MUMSS—Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

MWh—Megawatt hour

N/A—Not Applicable

NAV—Net asset value

N/M—Not Meaningful

Non-GAAP—Non-generally accepted accounting principles

NSFR—Net stable funding ratio, as proposed by the U.S. banking agencies

OCC—Office of the Comptroller of the Currency

OCI—Other comprehensive income (loss)

OTC—Over-the-counter

PRA—Prudential Regulation Authority

RMBS—Residential mortgage-backed securities

ROE—Return on average common equity

ROTCE—Return on average tangible common equity

RSU—Restricted stock units

RWA—Risk-weighted assets

SEC—U.S. Securities and Exchange Commission

SLR—Supplementary leverage ratio

S&P—Standard & Poor’s

SPE—Special purpose entity

SPOE—Single point of entry

March 2018 Form 10-Q 86

Glossary of Common Acronyms

TDR—Troubled debt restructuring

TLAC—Total loss-absorbing capacity

U.K.—United Kingdom

UPB—Unpaid principal balance

U.S.—United States of America

U.S. DOL—U.S. Department of Labor

U.S. GAAP—Accounting principles generally accepted in the United States of America

VaR—Value-at-Risk

VAT—Value-added tax

VIE—Variable interest entities

WACC—Implied weighted average cost of capital

WM—Wealth Management

87 March 2018 Form 10-Q

Other Information

Legal Proceedings

The following new matters and developments have occurred since previously reporting certain matters in the Firm’s 2017 Form 10-K. See also the disclosures set forth under “Legal Proceedings” in the 2017 Form 10-K.

Residential Mortgage and Credit Crisis Related Matters

On March 8, 2018, the court denied the Firm’s renewed motion to dismiss the notification claims in Deutsche Bank National Trust Company, as Trustee for the Morgan Stanley ABS Capital I Inc. Trust, Series 2007-NC1 v. Morgan Stanley ABS Capital I, Inc.

On March 8, 2018, the court granted plaintiff’s motion to amend its complaint to include failure to notify claims in Deutsche Bank National Trust Company, solely in its capacity as Trustee for Morgan Stanley ABS Capital I Inc. Trust, Series 2007-NC3 v. Morgan Stanley Mortgage Capital Holdings LLC, as Successor-by-Merger to Morgan Stanley Mortgage Capital Inc. On March 19, 2018, the Firm filed an answer to plaintiff’s amended complaint.

On March 9, 2018, the parties in Morgan Stanley Mortgage Loan Trust 2006-14SL, et al. v. Morgan Stanley Mortgage Capital Holdings LLC, as successor in interest to Morgan Stanley Mortgage Capital Inc. entered into agreements to settle the litigation, which are subject to court approval.

On April 4, 2018, the parties in Deutsche Bank National Trust Company, solely in its capacity as trustee for Morgan Stanley Structured Trust I 2007-1 v. Morgan Stanley Mortgage Capital Holdings LLC filed a stipulation voluntarily dismissing the action, with prejudice, pursuant to a settlement.

European Matters

On March 30, 2018, the Firm filed its defense to the claim brought by the public prosecutor for the Court of Accounts for the Republic of Italy in the matter styled Case number 2012/00406/MNV. A hearing was held on April 19, 2018. The timing of a decision is uncertain.

On March 20, 2018, the hearing on the parties’ final submissions in Banco Popolare Societá Cooperativa v. Morgan Stanley & Co. International plc & others was adjourned to May 17, 2018.

On April 26, 2018, the District Court in Amsterdam issued a decision in matters styled Case number 15/3637 and Case number 15/4353 dismissing the Dutch Tax Authority’s claims. The Dutch Tax Authority has until June 7, 2018 to file any appeal.

March 2018 Form 10-Q 88

Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth the information with respect to purchases made by or on behalf of the Firm of its common stock during the current quarter ended March 31, 2018.

Issuer Purchases of Equity Securities

$ in millions, except per share data	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs1		Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
Month #1 (January 1, 2018—January 31, 2018)
Share Repurchase Program2		3,466,000	$	57.14		3,466,000	$	2,302
Employee transactions3		10,078,944	$	55.81		—		—
Month #2 (February 1, 2018—February 28, 2018)
Share Repurchase Program2		10,170,000	$	54.81		10,170,000	$	1,745
Employee transactions3		838,924	$	56.86		—		—
Month #3 (March 1, 2018—March 31, 2018)
Share Repurchase Program2		8,691,835	$	56.89		8,691,835	$	1,250
Employee transactions3		142,392	$	56.05		—		—
Quarter ended at March 31, 2018
Share Repurchase Program2		22,327,835	$	55.98		22,327,835	$	1,250
Employee transactions3		11,060,260	$	55.89		—		—

1. Share purchases under publicly announced programs are made pursuant to open-market purchases, Rule 10b5-1 plans or privately negotiated transactions (including with employee benefit plans) as market conditions warrant and at prices the Firm deems appropriate and may be suspended at any time. As previously announced, on April 18, 2018, the Firm entered into a sales plan with Mitsubishi UFJ Financial Group, Inc. (“MUFG”) and Morgan Stanley & Co. LLC (“MS&Co.”) whereby MUFG will sell shares of the Firm’s common stock to the Firm, through its agent MS&Co., as part of the Company’s share repurchase program (as defined below). The sales plan is only intended to maintain MUFG’s ownership percentage below 24.9% in order to comply with MUFG’s passivity commitments to the Federal Reserve and will have no impact on the strategic alliance between MUFG and the Firm, including the joint venture in Japan.

2. The Firm’s Board of Directors has authorized the repurchase of the Firm’s outstanding stock under a share repurchase program (the “Share Repurchase Program”). The Share Repurchase Program is a program for capital management purposes that considers, among other things, business segment capital needs, as well as equity-based compensation and benefit plan requirements. The Share Repurchase Program has no set expiration or termination date. Share repurchases by the Firm are subject to regulatory approval. On June 28, 2017, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) announced that they did not object to our 2017 capital plan, which included a share repurchase of up to $5.0 billion of the Firm’s outstanding common stock during the period beginning July 1, 2017 through June 30, 2018. During the quarter ended March 31, 2018, the Firm repurchased approximately $1.25 billion of the Firm’s outstanding common stock as part of its Share Repurchase Program. For further information, see “Liquidity and Capital Resources—Capital Management.”

3. Includes shares acquired by the Firm in satisfaction of the tax withholding obligations on stock-based awards granted under the Firm’s stock-based compensation plans.

89 March 2018 Form 10-Q

Controls and Procedures

Under the supervision and with the participation of the Firm’s management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the Firm’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

No change in the Firm’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) occurred during the period covered by this report that materially affected, or is reasonably likely to materially affect, the Firm’s internal control over financial reporting.

Exhibits

An exhibit index has been filed as part of this Report on page E-1.

March 2018 Form 10-Q 90

Exhibit Index

Morgan Stanley

Quarter Ended March 31, 2018

Exhibit No.	Description
10.1	Amended and Restated Trust Agreement dated as of January 1, 2018 by and between Morgan Stanley and State Street Bank and Trust Company.
12	Statement Re: Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges and Preferred Stock Dividends (unaudited).
15	Letter of awareness from Deloitte & Touche LLP, dated May 4, 2018, concerning unaudited interim financial information.
31.1	Rule 13a-14(a) Certification of Chief Executive Officer.
31.2	Rule 13a-14(a) Certification of Chief Financial Officer.
32.1	Section 1350 Certification of Chief Executive Officer.
32.2	Section 1350 Certification of Chief Financial Officer.
101	Interactive data files pursuant to Rule 405 of Regulation S-T (unaudited): (i) the Consolidated Income Statements—Three Months Ended March 31, 2018 and 2017, (ii) the Consolidated Comprehensive Income Statements—Three Months Ended March 31, 2018 and 2017, (iii) the Consolidated Balance Sheets—at March 31, 2018 and December 31, 2017, (iv) the Consolidated Statements of Changes in Total Equity—Three Months Ended March 31, 2018 and 2017, (v) the Consolidated Cash Flow Statements—Three Months Ended March 31, 2018 and 2017, and (vi) Notes to Consolidated Financial Statements.

E-1

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MORGAN STANLEY

(Registrant)

By:                    /s/ JONATHAN PRUZAN

Jonathan Pruzan

Executive Vice President and

Chief Financial Officer

By:                        /s/  PAUL C. WIRTH

Paul C. Wirth

Deputy Chief Financial Officer

Date: May 4, 2018

S-1

EX-10.1

Exhibit 10.1

AMENDED AND RESTATED TRUST AGREEMENT

by and between

MORGAN STANLEY

and

STATE STREET BANK AND TRUST COMPANY

As of January 1, 2018

AMENDED AND RESTATED TRUST AGREEMENT

Table of Contents

Section		Page
RECITALS			1
1.	Trust Fund		2
2.	Payments to Trust Beneficiary		5
3.	Trustee Responsibility Regarding Payments to a Trust Beneficiary When the Company or any Subsidiary is Insolvent		7
4.	Term of the Trust and Payments to Company in Connection with Termination of the Trust		8
5.	Investment of Trust Assets		9
6.	Accounting by Trustee		10
7.	Responsibilities and Powers of Trustee		10
8.	Compensation and Expenses of Trustee		13
9.	Replacement of Trustee		14
10.	Amendment		14
11.	Severability and Alienation		15
12.	Governing Law		15
13.	Notices		15
14.	Signature in Counterparts		16

  Exhibits:

A. 1995 Equity Incentive Compensation Plan

B. Employees’ Equity Accumulation Plan

C. Directors’ Equity Capital Accumulation Plan

D. Equity Incentive Compensation Plan

E. 2009 Replacement Equity Incentive Compensation Plan for MSSB Employees

ii

AMENDED AND RESTATED

TRUST AGREEMENT

This AMENDED AND RESTATED TRUST AGREEMENT (this “Agreement”), made as of the 1^st day of January, 2018, by and between MORGAN STANLEY, a Delaware corporation (the “Company”), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company (in its individual capacity, “State Street” and, as trustee under this Agreement, the “Trustee”), hereby amends and restates the Amended and Restated Trust Agreement dated as of October 18, 2011 between the Company and State Street.

RECITALS:

WHEREAS, certain Managing Directors, Executive Directors, officers, other key employees and consultants of the Company or certain subsidiaries thereof (“Participants”) are eligible to receive shares (the “Benefits”) of the Company’s common stock, par value $0.01 per share (the “Stock”), pursuant to awards of stock units under any of the following plans of the Company:

● the 1995 Equity Incentive Compensation Plan;

● the Employees’ Equity Accumulation Plan;

● the Directors’ Equity Capital Accumulation Plan (“DECAP”);

● the Equity Incentive Compensation Plan

● the 2009 Replacement Equity Incentive Compensation Plan for Morgan Stanley Smith Barney Employees; and

● each other plan which the Company identifies to the Trustee in accordance with Section 11 of this Agreement,

as each may be amended, supplemented, replaced or extended, or any successor plan providing for similar benefits or awards, being hereinafter referred to collectively as the “Plans”. Copies of the first five of the Plans cited above are attached hereto as Exhibits A, B, C, D and E, respectively, and made a part hereof; and

WHEREAS, the Company wishes to establish a trust (a “Trust”), for the purpose of holding all of the shares of Stock underlying or associated with stock unit awards under the Plans, and to transfer to the Trust shares of Stock to be held therein, subject to the Company’s power to revoke the Trust in accordance with the terms thereof, in whole or in part, at any time or from time to time, until distributed to the

Participants and their beneficiaries (“Trust Beneficiaries”) as Benefits in such manner and at such time as specified in the Plans;

NOW, THEREFORE, for good and valuable consideration, the parties do hereby agree to amend and restate this Agreement and agree that the Trust shall be composed, held and disposed of as follows:

Section 1. Trust Fund.

(a) The Company has deposited with the Trustee in trust one share of Stock and cash in the amount of one thousand dollars ($1,000.00) which was the initial principal of the Trust to be held, administered and disposed of by the Trustee as provided in this Agreement together with additional deposits by the Company of cash or Stock from time to time. Subject to the terms of this Agreement, the initial deposit, any additional deposits, and any other assets held in the Trust shall be subject to the claims of the creditors of the Company and of any Company subsidiary that employs a Participant who is a Trust Beneficiary under this Agreement (each a “Subsidiary”) but, in the case of creditors of any Subsidiary, only to the extent of the assets held by the Trust in respect of employees (including former employees) of such Subsidiary and such additional assets, if any, as may be required to qualify the Trust as a grantor trust, within the meaning of Sections 671-677 of the Internal Revenue Code of 1986, as amended (the “Code”) (with respect to each Subsidiary, the “Allocable Assets”).

The Trust shall be funded only with shares of Stock, cash to purchase such shares, and, as applicable in accordance with Section 1(f) hereof, cash with respect to dividends paid on such shares of Stock. In addition, the Trustee may retain cash or short term instruments for payment of expenses and liabilities of the Trust. Shares of Stock contributed to the Trust or purchased with cash so contributed shall either be allocated to stock units (including dividend equivalents with respect to such stock units to be paid in Shares) awarded under the Plans (“Allocated Shares”) or be held in the Trust pending allocation to such stock units or other equity-based awards (“Unallocated Shares”). For purposes hereof, Unallocated Shares include shares of Stock held in the Trust that were considered Allocated Shares when contributed to, or purchased with cash held by, the Trust, but for which the corresponding stock units awarded under the Plans have been forfeited. The Company shall from time to time identify to the Trustee (i) all Allocated Shares that correspond to stock units awarded under DECAP, with such shares referred to herein as the “DECAP Portfolio,” (ii) all Allocated Shares that correspond to stock unit awards that provide for dividend

2

equivalents on such stock units to be reinvested in shares of Stock (other than Allocated Shares attributed to the DECAP Portfolio), with such shares (together with shares purchased pursuant to such dividend reinvestment) referred to herein as the “Dividend Reinvestment Shares,” and (iii) all Allocated Shares that correspond to stock unit awards granted to Trust Beneficiaries that, pursuant to the terms of the award as set forth in the applicable award documentation, do not provide for dividend equivalents on such stock units (such shares referred to herein as the “Non-Dividend Shares”). Further, the Company shall from time to time identify to the Trustee Allocated Shares that correspond to stock units awarded under the Plans and which shall be deemed to constitute, and shall be referred to, as the “Non-Passthrough Portfolio.” The Company shall also from time to time identify to the Trustee those Trust Beneficiaries who have been awarded stock units for which corresponding shares of Stock are held in the Non-Passthrough Portfolio. Such Trust Beneficiaries are referred to as “Non-Passthrough Participants.”

(b) Except as otherwise provided herein, the Trust hereby established shall be revocable by the Company, in whole or in part, at any time or from time to time, without the consent of any other person or entity. Subject to the provisions of Section 3 and notwithstanding any other provision in this agreement to the contrary, (i) the Company may not revoke the Trust to the extent of any shares corresponding to a stock unit award of a Trust Beneficiary which award at the time of such revocation is unsettled but currently payable, all in accordance with the terms of the Plans and the award granted thereunder and (ii) the Company may not revoke the Trust to the extent of any dividend payable to the Trustee as record owner on the record date which dividend at the time of such revocation is unsettled but currently distributable by the Trustee as a dividend equivalent to any Trust Beneficiary, in accordance with paragraph (f) of this Section 1 and the terms of the Plan and the award granted thereunder. It is specifically noted that the Company may terminate the Trust to the extent of any Unallocated Shares at any time.

(c) The Trust is intended to be a grantor trust, within the meaning of Sections 671-677 of the Code, and shall be construed accordingly.

(d) The assets of the Trust shall be held separate and apart from other funds of the Company and shall be used exclusively for the uses and purposes herein set forth. Notwithstanding any other provision of this Agreement to the contrary and subject to the provisions of Section 3, no Trust Beneficiary shall have any claim on, or any beneficial ownership interest in, any assets of the Trust other than assets to which the

3

Trust Beneficiary is entitled to a distribution as provided in Section 2 and paragraph (f) of this Section 1. No rights to a distribution of a Benefit or dividends declared thereon shall be created under this Agreement independently of any Trust Beneficiary’s right to a distribution or payment under the Plans and the awards granted thereunder. Neither the Company nor the Trustee shall have any power to create a security interest in the assets of the Trust in favor of any Trust Beneficiary, any person entitled to Benefits by reason of the death of any Trust Beneficiary or any creditor of either the Company or any Subsidiary. Nothing contained herein or in any provision of the Plans shall operate to create a security interest in any part of the assets of the Trust on behalf of any Trust Beneficiary or any person entitled to Benefits upon the death of any Trust Beneficiary.

(e) The Company may at any time or from time to time make additional deposits of cash or shares of Stock to the Trust to augment the assets to be held, administered and disposed of by the Trustee as provided in this Agreement. The Trustee shall have no duty or obligation to require the Company to make any contribution to the Trust.

(f) Any cash dividend paid in respect of Allocated Shares held in the Trust shall be distributed by or on behalf of the Trustee as a dividend equivalent to Trust Beneficiaries as and when directed by the Company, except to the extent any Trust Beneficiaries are not entitled to dividends or dividend equivalents pursuant to the terms of the applicable award with respect to which the Allocated Shares relate. If a Participant (Trust Beneficiary) is not eligible or entitled to receive dividends or dividend equivalents with respect to stock unit awards pursuant to the terms of the applicable award, then, as directed by the Company, the Trustee shall (x) waive the right to receive dividends with respect to any Allocated Shares underlying such awards, (y) deliver the aggregate amount of dividends paid to the Trust with respect to any such shares to the Company, or (z) retain the cash dividends paid in respect to such shares to be used for payment of expenses and liabilities of the Trust. Any cash dividend paid in respect of Dividend Reinvestment Shares shall, as promptly as possible after receipt thereof by the Trustee, be paid by the Trustee to the Company in consideration for the purchase of a number of additional shares of Stock determined by dividing (1) the aggregate amount of the cash dividend paid on all shares of Stock that are Dividend Reinvestment Shares on the dividend record date by (ii) the fair market value (as determined by the Company in its sole discretion) of one share of Stock on the dividend payment date. The Company shall

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be responsible for calculating the number of shares to be purchased by the Trustee. All shares of Stock purchased by the Trustee pursuant to the third sentence of this paragraph (f) will be treated as Dividend Reinvestment Shares and will be treated as dividend equivalents allocated to Participants in accordance with the applicable Plan. Any cash dividend paid in respect of Unallocated Shares held in the Trust shall be delivered by the Trustee to the Company. The Company shall act as agent for the Trustee in making distributions of dividend equivalents to Trust Beneficiaries unless the Trustee gives the Company 90 days’ notice, in writing, that the Trustee does not want the Company to act as its agent. The Trustee may require the Company to provide certification of its distributions of dividend equivalents to Trust Beneficiaries. Any other dividend or distribution made with respect to the shares of Stock held in the Trust shall be distributed to the Trustee and delivered by the Trustee to the Company for disposition by the Company (i) in the case of Allocated Shares, in accordance with the Plan and awards granted thereunder, and (ii) in the case of Unallocated Shares, as determined by the Company in its discretion.

(g) Any cash dividend paid in respect of shares of Stock included in the DECAP Portfolio shall, as promptly as possible after receipt thereof by the Trustee, be paid by the Trustee to the Company in consideration for the purchase of a number of additional shares of Stock determined by dividing (i) the aggregate amount of the cash dividend paid on all shares of Stock included in the DECAP Portfolio on the dividend record date by (ii) the Fair Market Value, as defined in DECAP, of one share of Stock on the dividend payment date. The Company shall be responsible for calculating Fair Market Value in accordance with the preceding sentence and the number of shares to be purchased by the Trustee. All shares of Stock purchased by the Trustee pursuant to this paragraph (g) will be included in the DECAP Portfolio and will be treated as dividend equivalents allocated to participants in DECAP in accordance with the Plan.

Section 2. Payments to Trust Beneficiary.

(a) The Trustee shall distribute the Benefits and, if provided for in the terms of the Plans and awards granted thereunder, any dividend equivalents accumulated thereon, in accordance with the Plans as and when directed by the Compensation, Management Development and Succession Committee (the “Committee”) of the Board of Directors of the Company or by an officer of the Company, as hereinafter set forth, if and to the extent that neither the Company nor any of its Subsidiaries is insolvent at the time of such distribution and shares of Stock are available for such distribution. Subject to the provisions of

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Section 3, a Trust Beneficiary shall be entitled to a distribution of Benefits from the Trust at the time the stock unit award becomes currently payable and is no longer subject to forfeiture, all in accordance with the terms of the Plans and the award granted thereunder, provided that the Trust has not been revoked prior to such time and that the Company’s obligation under the stock unit award has not been satisfied otherwise. The Committee or an officer of the Company will instruct the Trustee as to the eligibility of any Trust Beneficiary for such distribution, the correct amount of each distribution and when to make the distribution. The Committee or its designee shall keep accurate records with respect to the Benefits and, if provided for in the terms of the Plans and awards granted thereunder, any dividend equivalents accumulated thereon, payable from the Trust and the Trustee may rely upon such records without a duty of further inquiry in performing its duties under this Agreement. To the extent Benefits and, if provided for in the terms of the Plans and awards granted thereunder, any dividend equivalents accumulated thereon, have been paid from the Trust hereunder, the Company shall be relieved of its obligation to pay such Benefits.

(b) If at any time the number of shares held in the Trust is not sufficient to make any directed distribution of Benefits, in accordance with the Plans, to any Trust Beneficiary then entitled to a distribution, the Trustee shall distribute the balance of the shares held in the Trust to or on behalf of all the Trust Beneficiaries then entitled to distributions in the following manner: the Benefits distributed to any Trust Beneficiary shall be equal to the balance of shares held in the Trust multiplied by a fraction the numerator of which is the amount of Benefits such Trust Beneficiary is entitled to distribution of at that time and the denominator of which is the amount of Benefits all Trust Beneficiaries are entitled to distribution of at that time. No provision of this Trust Agreement shall relieve the Company of its liabilities to pay Benefits except to the extent that the same have been paid from the Trust hereunder.

(c) The Trustee shall make provision for withholding of any federal, state or local taxes that may be required to be withheld in respect of any distribution from the Trust as directed by the Committee or by an officer of the Company and the Trustee shall remit any shares or other amounts so withheld as instructed by the Committee or by an officer of the Company, including to the Company if so instructed by the Committee or by such officer.

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Section 3. Trustee Responsibility Regarding Payments to a Trust Beneficiary When the Company or any Subsidiary Is Insolvent.

(a) The Company or a Subsidiary of the Company shall be considered “Insolvent” for purposes of this Trust Agreement if (i) the Company or the Subsidiary, whichever is applicable, is unable or otherwise fails to pay its debts, other than debts owed to the Company or to entities 50% or more owned or controlled, directly or indirectly, by the Company, as they mature in accordance with the terms of the relevant debt instruments or (ii) the Company or the Subsidiary is subject to a pending proceeding as a debtor under Title 11 of the United States Code (11 U.S.C. § 101 et seq.), as amended from time to time, or any successor statute or under Title 15 of the United States Code (15 U.S.C. § 78aaa et seq.), as amended from time to time, or any successor statute. If the Company is Insolvent, the Trustee promptly shall discontinue distributing Benefits under Section 2 and dividends, dividend equivalents or other income earned on the shares of Stock or other assets held in Trust, and if a Subsidiary is Insolvent, the Trustee promptly shall discontinue distributing Benefits under Section 2 and dividends, dividend equivalents or other income earned on the shares of Stock or other assets held in the Trust that constitute such Subsidiary’s Allocable Assets to any Trust Beneficiaries who are employees (including former employees) of such Subsidiary. Thereafter, subject to paragraph (b) below, the Trustee shall hold all of the assets and income of this Trust (or, in the case of a Subsidiary that is Insolvent, shall hold all of such Subsidiary’s Allocable Assets and any dividends or other income earned thereon) for the benefit of the general creditors of the Company or such Subsidiary, as the case may be, or both, and shall make such assets and income available to such general creditors at such times and in such amounts as directed by a court of competent jurisdiction. The Company shall not replace any shares of Stock paid to such general creditors. Notwithstanding the foregoing, if new awards of stock units are made, shares of Stock corresponding to such stock units may be contributed to the Trust.

(b) The Board of Directors or the Chairman or President of the Company shall have the duty to inform the Trustee promptly if the Company or any of its Subsidiaries becomes Insolvent. If a person claiming to be a creditor of the Company or any of its Subsidiaries alleges in writing to the Trustee that the Company or a Subsidiary has become Insolvent, the Trustee, to the extent set forth in Section 3(a), promptly shall suspend the distribution of Benefits under Section 2 and of dividend equivalents or other income earned on the shares of Stock or other assets held in Trust and shall contact the Company’s Chairman or

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President and the Board of Directors. If the Company’s Chairman or President or the Board of Directors fails to confirm or deny such claim, the Trustee shall continue the suspension of Benefit distributions to Trust Beneficiaries and of income on the assets held in Trust until or unless a court of competent jurisdiction shall have determined that neither the Company nor any of its Subsidiaries is Insolvent. The Trustee shall also have the right at any time to apply to a court of competent jurisdiction for instructions on how to proceed if the Trustee determines that such action is necessary or appropriate in light of any uncertainty that may reasonably exist regarding whether or not the Company or a Subsidiary is Insolvent. Unless the Trustee has actual knowledge that the Company or a Subsidiary is Insolvent, the Trustee shall have no duty to inquire whether the Company or any of its Subsidiaries is Insolvent. In the absence of actual knowledge to the contrary, if the Trustee is notified pursuant to the foregoing provisions by a court of competent jurisdiction, by the Company’s Chairman or President or by the Board of Directors that the Company or, in the case of a Subsidiary, such Subsidiary is not or is no longer Insolvent, the Trustee shall resume the distribution of Benefits under Section 2 and of dividend equivalents or other income earned on the shares of Stock or other assets held in the Trust. Upon resumption of the distribution of Benefits by the Trustee, the first distribution to each Trust Beneficiary to whom distributions were so suspended shall include (to the extent that shares are available therefor) the amount by which the aggregate of all distributions which would have been made to such Trust Beneficiary in accordance with instructions given by the Committee or by officers of the Company, but for the discontinuance of distributions pursuant to paragraph (a) above, exceeds the aggregate distributions on account of Benefits actually made to such Trust Beneficiary by the Company (as certified to the Trustee by the Company in writing) during such period of discontinuance.

Section 4. Term of the Trust and Payments to Company in Connection with Termination of the Trust.

Unless sooner terminated, this Trust shall terminate upon the earlier of (a) the satisfaction of all the Company’s obligations under the Plans to the Trust Beneficiaries, (b) the receipt of an offer (including but not limited to a tender offer or exchange offer within the meaning of the Securities Exchange Act of 1934 as from time to time amended and in effect) to acquire any shares of Stock held by the Trustee in the Trust, other than an offer by the Company or any affiliate 50% or more of which was owned or controlled

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directly or indirectly by the Company prior to the transaction (a “Self-Tender”), or (c) the twenty-first anniversary of the death of the last to survive of the employees of the Company or its subsidiaries who are Trust Beneficiaries as of the date of execution of this Agreement. Upon any termination of the Trust, all shares of Stock and other assets, if any, held in the Trust shall be delivered to the Company or as otherwise directed by the Company. The Company shall direct the Trustee as to the distribution of such shares and other assets no later than the final payment date for any stock units to which there correspond Allocated Shares held in the Trust.

Section 5. Investment of Trust Assets.

Unless otherwise directed by the Committee or by an officer of the Company and subject to the Trustee’s discretion to retain cash or short term instruments for the payment of expenses and liabilities of the Trust, other than with respect to cash dividends paid in respect of Allocated Shares held in the Trust and interest earned thereon (as described below), cash contributed by the Company shall be invested in shares of Stock. Except as otherwise provided herein, assets of the Trust shall be invested in shares of Stock at all times.

Notwithstanding anything in this Agreement to the contrary, any cash dividends paid in respect of Allocated Shares other than Non-Dividend Shares that, pursuant to the Plans and any applicable award, (A) are not either (i) used to purchase shares of Stock in connection with stock unit awards that provide for dividend equivalents on such stock units to be reinvested in shares of Stock or (ii) immediately distributable as dividend equivalents, but (B) are instead to be credited with respect to a Participant’s vested and unvested stock units and distributed as dividend equivalents at a future time when the stock unit award(s) corresponding to such Allocated Shares become currently payable, shall be invested in short-term investments, as directed by the Committee or by an officer of the Company, until the Trustee is otherwise directed by the Committee or by an officer of the Company or until the Trust Beneficiaries, who are entitled to the cash dividend equivalents pursuant to the terms of the Plans and awards granted thereunder, shall be entitled to receive distributions from the Trust (or the Company, as agent for the Trustee, as described in Section 1(f)) in accordance with the Plans and awards granted thereunder.

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Section 6. Accounting by Trustee.

The Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions, including such specific records as shall be agreed upon in writing between the Company or the Committee and the Trustee. All such accounts, books and records shall be open to inspection and audit at all reasonable times by the Company, its officers and the Committee. Within sixty (60) days following the close of each calendar year, the removal or resignation of the Trustee or the termination of this Trust, the Trustee shall deliver to the Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal, resignation or termination, setting forth all investments, receipts, disbursements and other transactions effected by it, and showing all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal, resignation or termination, as the case may be. Upon written request a Trust Beneficiary may examine the Trustee’s records and accounts regarding the number of shares of Stock held in the Trust and the dividends paid on such shares during the current year; provided that no Trust Beneficiary shall have any right to see such records or accounts as they relate to individual interests in the Trust other than his own.

Section 7. Responsibilities and Powers of Trustee.

(a) The Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; provided, however, that the Trustee shall incur no liability to anyone for (i) any action taken pursuant to a direction, request, or approval given by the Company, by the Committee or by an officer of the Company contemplated by and complying with the terms of this Trust Agreement or (ii) any inaction taken because of the failure of the Company, the Committee or an officer of the Company to give such a direction, request or approval, except in the case of the gross negligence or willful misconduct or from the Trustee’s breach of this Agreement. To the extent that the Trustee is acting pursuant to such direction, request or approval or is not acting because of the absence thereof and has not acted with gross negligence or willful misconduct, the Trustee shall be relieved of the “prudent man rule” for investments.

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(b) Subject to the provisions of Section 3(b), the Trustee shall have no duty to make an independent investigation as to the occurrence of any event giving rise to a distribution hereunder or under the Plans, and shall be entitled to rely conclusively on the determinations of the Company, the Board of Directors, the Company’s Chairman or President, the Committee or an officer of the Company, as the case may be, as to the occurrence of any such event, which determinations shall be binding upon the Trustee, the Company and the Trust Beneficiaries. The Company shall indemnify the Trustee against losses, liabilities, claims, costs and expenses in connection with the administration of the Trust (including in connection with litigation undertaken or defended by the Trustee and in connection with action taken or omitted in accordance with this Agreement, unless resulting from the gross negligence or willful misconduct of the Trustee). This indemnification shall also extend to the officers, employees and agents of the Trustee. To the extent, but only to such extent, that the Company fails to make any payment on account of an indemnity provided in this Section 7, such payment shall be made from the Trust assets; provided, however, that the amount of any such payment from the Trust shall thereafter constitute a claim of the Trustee on behalf of the Trust against the Company and may be offset by the Trustee against any amount payable to the Company pursuant to Section 2(c).

(c) The Trustee may hire agents, accountants and attorneys (including the Company’s attorneys) to assist with its responsibilities under this Agreement subject to the consent of the Company.

(d) The Trustee shall have, without exclusion, all powers conferred on trustees by applicable law unless expressly provided otherwise herein.

(e) The Committee and the officers of the Company shall direct the Trustee in administering the Trust, as provided in this Agreement.

(f) Any corporation into which the Trustee (or any other corporation acting as Trustee) shall be merged or with which it shall be consolidated, or any corporation resulting from any merger, reorganization or consolidation to which it shall be a party, or any corporation to which all or substantially all of its trust business shall be transferred, shall be the successor of the Trustee (or of any other corporation acting as Trustee) as Trustee under this Agreement, without the execution or filing of any instrument or the performance of any further act or the order or judgment of any court and with the same powers, authorities and discretions.

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(g) Until such time as the Company amends the Trust to provide otherwise, the Trustee shall have no discretion or authority to vote Stock held in the Trust by the Trustee on any matter presented for a vote of the stockholders of the Company except in accordance with the provisions of this paragraph (g). The Trustee shall solicit instructions from each Trust Beneficiary (x) who is an active employee (an “Active Employee”) of the Company or any of its subsidiaries or affiliates or (y) who has been awarded stock units for which corresponding shares of Stock are held in the DECAP Portfolio (a “DECAP Participant”), as indicated by the Company, as to the manner in which the shares of Stock held in the Trust corresponding to stock units awarded to such Trust Beneficiary under the Plans (including any shares of Stock comprising dividend equivalents corresponding to such stock units) shall be voted, provided, however, that the Trustee shall not solicit such instructions from Non-Passthrough Participants. The Trustee shall follow all proper instructions that are timely received with respect to such shares of Stock. Without limiting the generality of the preceding sentence, unless instructions provide to the contrary they shall be deemed to include authorization for the Trustee to vote, after due consideration, in its discretion (which discretion includes the discretion to grant a proxy to Company management to vote) any shares of Stock held in the Trust on such matters, other than matters identified in the relevant notice of meeting of the Company’s stockholders and for which the Trust Beneficiary has specified voting instructions, as may properly come before the meeting (“Other Matters”). The Trustee shall vote all Stock held in the Trust as to which no proper instructions are received (including Stock as to which instructions are not solicited and Stock as to which instructions are solicited but not received) (“Uninstructed Shares”) in proportion to Stock for which proper instructions have been received from Active Employees; provided, however, that the Trustee may vote, after due consideration, in its discretion, which discretion includes the discretion to grant a proxy to Company management to vote, any Uninstructed Shares on any Other Matter; and provided, further, that the Trustee shall not vote or grant a proxy to vote any Uninstructed Shares held in the DECAP Portfolio.

The Trustee shall communicate or cause to be communicated to each Trust Beneficiary the provisions of this Agreement relating to the right of such Trust Beneficiary, while an Active Employee (other than a Non-Passthrough Participant) or a DECAP Participant, to direct the Trustee with respect to the voting of shares of Stock corresponding to such Trust Beneficiary’s stock units (including any shares of Stock comprising dividend equivalents corresponding to such stock units). Such communication shall also

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discuss the consequences of an instruction to abstain or withhold authority to vote and any failure to timely instruct the Trustee.

(h) The Company shall promptly notify each Trust Beneficiary of the existence of the Trust and such Beneficiary may examine a copy of this Agreement upon request. The Trustee shall distribute or cause to be distributed any and all communications required by paragraph (g) of this Section 7. The Company shall provide the Trustee with such information and assistance as the Trustee may reasonably request in connection with any communications or distributions to Trust Beneficiaries.

(i) Notwithstanding anything in this Agreement to the contrary, any cash, or income on other proceeds, received as a result of a transaction presented to a vote of Stockholders or as a result of a Self-Tender shall be invested in short-term instruments as directed by the Committee or by an officer of the Company, until the Trustee is otherwise directed by the Committee or by an officer of the Company or until the Trust Beneficiaries, to whose stock unit awards the shares subject to such transaction corresponded, shall be entitled to receive distributions from the Trust in accordance with the Plans.

Section 8. Compensation and Expenses of Trustee.

(a) The Trustee shall be entitled to receive such reasonable compensation for its services and reimbursement for reasonable expenses incurred with respect to the administration of the Trust, including fees incurred by the Trustee pursuant to Section 7(c) of this Agreement, in either case as shall be agreed upon between the Trustee and the Company. Such compensation and expenses shall be paid (1) first, from the amount of interest earned by the Trust with respect cash dividends paid in respect of shares of Stock held by the Trust for the payment of corresponding dividend equivalents to the Trust Beneficiaries in accordance with the terms of the Plans and awards granted thereunder, and (2) to the extent such interest is insufficient or otherwise unavailable to pay in full such compensation and expenses, by the Company; provided, however, that if such compensation and expenses are not paid by the Company after demand from the Trustee, then such compensation and expenses otherwise payable by the Company pursuant to clause (2) above may be paid from the assets of the Trust and the amount of any such payment from the Trust shall thereafter constitute a claim of the Trustee on behalf of the Trust against the Company and may be offset by the Trustee against any amount payable to the Company pursuant to Section 2(c).

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Section 9. Replacement of Trustee.

(a) The Trustee may resign at any time, subject to the appointment and qualification of a successor trustee, by giving 60 days prior notice of such resignation in writing to the Company. The Trustee may be removed by the Company at any time without prior notice. In the event of the resignation or removal of the Trustee, a successor corporate trustee shall be appointed by the Company.

(b) In the event of the appointment of a successor trustee, such successor trustee will succeed to all the right, title and estate of, and will be, the Trustee; and the retiring trustee will after the settlement of its final account and the receipt of any compensation or expenses due it, deliver the Trust to the successor trustee together with all such instruments of transfer, conveyance, assignment and further assurance as the successor trustee may reasonably require.

Section 10. Amendment.

(a) This Agreement may be amended by a written instrument executed by the Company at any time and to any extent except that, subject to the limitation below, in no event shall the rights of the creditors of the Company or any Subsidiary be diminished and no amendment may be made which would permit the Company to revoke the Trust to the extent of (i) any shares corresponding to a stock unit award of a Trust Beneficiary which award is unsettled but currently payable or (ii) any dividend payable to the Trustee as record owner on the record date which dividend is distributable by the Trustee as a dividend equivalent to any Trust Beneficiary in accordance with Section 1(f) hereof. In addition, no amendment may be made without the Trustee’s consent which would change the Trustee’s duties or responsibilities under this Agreement.

(b) The Plans may be amended from time to time by the Company in accordance with their terms without the consent or concurrence of the Trustee and the Company will provide the Trustee with such amendments in a timely manner. The Company shall provide the Trustee with a copy of any amendment, certified by the Company’s Secretary, Assistant Secretary or such person’s designee, within 90 days after its adoption. In the event of any conflict between the Plans and this Agreement concerning the Trustee’s responsibilities, this Agreement shall govern.

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Section 11. Severability and Alienation.

(a) Any provision of this Agreement prohibited by law shall be ineffective to the extent of any such prohibition without invalidating the remaining provisions hereof and this Agreement shall be reconstituted and enforceable as if such illegal provision were never included.

(b) Subject to the provisions of Section 3, Benefits under this Agreement may not be anticipated, assigned (either at law or in equity), alienated or subject to attachment, garnishment, levy, execution or other legal or equitable process.

In addition to the foregoing, the Company from time to time may unilaterally amend the definition of “Plans” set forth in the first Whereas clause of this Agreement to include additional plans of the Company or one of its subsidiaries which provide for awards of stock units. The Company shall effect any such amendment by providing the Trustee with written notice identifying the plan or plans to be added to the definition of “Plans” and shall furnish the Trustee with a copy of the relevant plan or plans. Following such actions by the Company, the plan or plans so identified shall be included among the plans which collectively constitute the “Plans” for purposes of this Agreement, and such plan or plans shall be considered a part hereof.

Section 12. Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.

Section 13. Notices.

(a) Communications to the Company or Committee shall be addressed to the Company or Committee, as applicable, at 1585 Broadway, New York, New York 10036, Attn: Chief Legal Officer and Secretary, provided, however, that upon the Company’s or Committee’s written request, such communications shall be sent to such other address as the Company or Committee may specify.

(b) Communications to the Trustee shall be addressed to CitiStreet at Company Stock Management, 200 Newport Avenue, JQ3N, North Quincy, Massachusetts 02171, Attn: Anne Muir; provided, however, that upon the Trustee’s written request, such communications shall be sent to such other address as the Trustee may specify.

(c) No communication shall be binding on the addressee thereof prior to receipt thereof.

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Section 14. Signature in Counterparts.

This Agreement may be signed in counterparts, each of which shall be an original but all of which together will constitute one and the same instrument.

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IN WITNESS WHEREOF, the Company and State Street have executed this Agreement as of the date first above written.

MORGAN STANLEY
By:	/s/ Martin M. Cohen
	Name: Martin M. Cohen
	Title:   Secretary

STATE STREET GLOBAL ADVISORS TRUST COMPANY
By:	/s/ Monet Ewing
	Name: Monet Ewing
	Title: Vice President

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The following exhibits are already filed as exhibits to registration statements filed by Morgan Stanley or its predecessor companies under the Securities Act or to reports or registration statements filed by Morgan Stanley or its predecessor companies under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), respectively, and are hereby incorporated by reference to such statements or reports. Morgan Stanley’s Exchange Act file number is 1-11758. The Exchange Act file number of Morgan Stanley Group Inc., a predecessor company (“MSG”), was 1-9085.

Exhibit A: 1995 Equity Incentive Compensation Plan, as amended

(Annex A to MSG’s Proxy Statement for its 1996 Annual Meeting of Stockholders) as amended by Amendment (Exhibit 10.39 to Morgan Stanley’s Annual Report on Form 10-K for the fiscal year ended November 30, 2000), Amendment (Exhibit 10.5 to Morgan Stanley’s Quarterly Report on Form 10-Q for the quarter ended August 31, 2005), Amendment (Exhibit 10.3 to Morgan Stanley’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2006), Amendment (Exhibit 10.24 to Morgan Stanley’s Annual Report on Form 10-K for the fiscal year ended November 30, 2006) and Amendment (Exhibit 10.22 to Morgan Stanley’s Annual Report on Form 10-K for the fiscal year ended November 30, 2007)

Exhibit B: Employees’ Equity Accumulation Plan, amended and restated as of November 26, 2007

(Exhibit 10.12 to Morgan Stanley’s Annual Report on Form 10-K for the fiscal year ended November 30, 2007)

Exhibit C: Directors’ Equity Capital Accumulation Plan, as amended and restated as of March 30, 2017

(Exhibit 10.2 to Morgan Stanley’s Current Report on Form 8-K dated May 22, 2017)

Exhibit D: Equity Incentive Compensation Plan, as amended and restated as of March 30, 2017

(Exhibit 10.1 to Morgan Stanley’s Current Report on Form 8-K dated May 22, 2017)

Exhibit E: 2009 Replacement Equity Incentive Compensation Plan for Morgan Stanley Smith Barney Employees

(Exhibit 4.2 to Morgan Stanley’s Registration Statement on Form S-8 (No. 333-159504)).

EX-12

EXHIBIT 12

Morgan Stanley

Ratio of Earnings to Fixed Charges

and Ratio of Earnings to Fixed Charges and Preferred Stock Dividends

(Unaudited)

	Three Months Ended March 31, 2018		Twelve Months Ended December 31,
$ in millions			2017		2016		2015		2014		2013
Ratio of Earnings to Fixed Charges
Earnings1	$	3,502	$	10,295	$	8,805	$	8,229	$	3,235	$	3,502
Fixed charges2		1,999		6,010		3,575		2,987		3,935		4,695
Total earnings and fixed charges	$	5,501	$	16,305	$	12,380	$	11,216	$	7,170	$	8,197
Fixed charges2
Total interest expense3	$	1,936	$	5,767	$	3,336	$	2,742	$	3,679	$	4,414
Interest factor in rents		63		243		239		245		256		281
Total fixed charges	$	1,999	$	6,010	$	3,575	$	2,987	$	3,935	$	4,695
Ratio of earnings to fixed charges		2.8		2.7		3.5		3.8		1.8		1.7
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
Earnings1	$	3,502	$	10,295	$	8,805	$	8,229	$	3,235	$	3,502
Fixed charges2		1,999		6,010		3,575		2,987		3,935		4,695
Total earnings and fixed charges	$	5,501	$	16,305	$	12,380	$	11,216	$	7,170	$	8,197
Fixed charges2
Total interest expense3	$	1,936	$	5,767	$	3,336	$	2,742	$	3,679	$	4,414
Interest factor in rents		63		243		239		245		256		281
Preferred stock dividends4		118		873		676		610		311		150
Total fixed charges and preferred stock dividends	$	2,117	$	6,883	$	4,251	$	3,597	$	4,246	$	4,845
Ratio of earnings to fixed charges and preferred stock dividends		2.6		2.4		2.9		3.1		1.7		1.7

1. Amounts represent earnings before income taxes and do not include dividends on preferred securities, income (loss) from discontinued operations, noncontrolling interests and income or loss from equity investees.

2. Fixed charges do not include interest expense on uncertain tax liabilities as the Firm records these amounts within Provision for income taxes.

3. Amounts consist of interest cost, including interest on deposits and capitalized interest.

4. The preferred stock dividends amount represents pre-tax earnings required to cover dividends on preferred stock.

EX-15

EXHIBIT 15

To the Board of Directors and Shareholders of Morgan Stanley:

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited condensed consolidated interim financial statements of Morgan Stanley and subsidiaries (the “Firm”) for the three-month periods ended March 31, 2018 and 2017, as indicated in our report dated May 4, 2018; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, is incorporated by reference in the following Registration Statements of the Firm:

Filed on Form S-3:

Registration Statement No. 33-57202

Registration Statement No. 33-60734

Registration Statement No. 33-89748

Registration Statement No. 33-92172

Registration Statement No. 333-07947

Registration Statement No. 333-27881

Registration Statement No. 333-27893

Registration Statement No. 333-27919

Registration Statement No. 333-46403

Registration Statement No. 333-46935

Registration Statement No. 333-76111

Registration Statement No. 333-75289

Registration Statement No. 333-34392

Registration Statement No. 333-47576

Registration Statement No. 333-83616

Registration Statement No. 333-106789

Registration Statement No. 333-117752

Registration Statement No. 333-129243

Registration Statement No. 333-131266

Registration Statement No. 333-155622

Registration Statement No. 333-156423

Registration Statement No. 333-178081

Registration Statement No. 333-200365

Registration Statement No. 333-221595

Filed on Form S-4:

Registration Statement No. 333-25003

Filed on Form S-8:

Registration Statement No. 33-63024

Registration Statement No. 33-63026

Registration Statement No. 33-78038

Registration Statement No. 33-79516

Registration Statement No. 33-82240

Registration Statement No. 33-82242

Registration Statement No. 33-82244

Registration Statement No. 333-04212

Registration Statement No. 333-28141

Registration Statement No. 333-28263

Registration Statement No. 333-62869

Registration Statement No. 333-78081

Registration Statement No. 333-95303

Registration Statement No. 333-55972

Registration Statement No. 333-85148

Registration Statement No. 333-85150

Registration Statement No. 333-108223

Registration Statement No. 333-142874

Registration Statement No. 333-146954

Registration Statement No. 333-159503

Registration Statement No. 333-159504

Registration Statement No. 333-159505

Registration Statement No. 333-168278

Registration Statement No. 333-172634

Registration Statement No. 333-177454

Registration Statement No. 333-183595

Registration Statement No. 333-188649

Registration Statement No. 333-192448

Registration Statement No. 333-204504

Registration Statement No. 333-211723

Registration Statement No. 333-218377

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statements prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/ Deloitte & Touche LLP

New York, New York

May 4, 2018

EX-31.1

EXHIBIT 31.1

Certification

I, James P. Gorman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Morgan Stanley;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2018

/S/JAMES P. GORMAN

James P. Gorman

Chairman of the Board and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification

I, Jonathan Pruzan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Morgan Stanley;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2018

/S/ JONATHAN PRUZAN

Jonathan Pruzan

Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley (the “Firm”) on Form 10-Q for the quarter ended March 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James P. Gorman, Chairman of the Board and Chief Executive Officer of the Firm, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Firm.

/s/ JAMES P. GORMAN

James P. Gorman

Chairman of the Board and

Chief Executive Officer

Dated: May 4, 2018

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley (the “Firm”) on Form 10-Q for the quarter ended March 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jonathan Pruzan, Executive Vice President and Chief Financial Officer of the Firm, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Firm.

/s/ JONATHAN PRUZAN

Jonathan Pruzan

Executive Vice President and

Chief Financial Officer

Dated: May 4, 2018

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 30, 2018
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Trading Symbol	MS
Entity Registrant Name	MORGAN STANLEY
Entity Central Index Key	0000895421
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,770,260,439

XML

Consolidated Income Statements (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenues
Investment banking	$ 1,634	$ 1,545
Trading	3,770	3,235
Investments	126	165
Commissions and fees	1,173	1,033
Asset management	3,192	2,767
Other	207	229
Total non-interest revenues	10,102	8,974
Interest income	2,860	1,965
Interest expense	1,885	1,194
Net interest	975	771
Net revenues	11,077	9,745
Non-interest expenses
Compensation and benefits	4,914	4,466
Occupancy and equipment	336	327
Brokerage, clearing and exchange fees	627	509
Information processing and communications	478	428
Marketing and business development	140	136
Professional services	510	527
Other	652	544
Total non-interest expenses	7,657	6,937
Income from continuing operations before income taxes	3,420	2,808
Provision for income taxes	714	815
Income from continuing operations	2,706	1,993
Income (loss) from discontinued operations, net of income taxes	(2)	(22)
Net income	2,704	1,971
Net income applicable to noncontrolling interests	36	41
Net income applicable to Morgan Stanley	2,668	1,930
Preferred stock dividends and other	93	90
Earnings applicable to Morgan Stanley common shareholders	$ 2,575	$ 1,840
Earnings per basic common share
Income from continuing operations	$ 1.48	$ 1.03
Income (loss) from discontinued operations	0	(0.01)
Earnings per basic common share	1.48	1.02
Earnings per diluted common share
Income from continuing operations	1.46	1.01
Income (loss) from discontinued operations	(0.01)	(0.01)
Earnings per diluted common share	1.45	1
Dividends declared per common share	$ 0.25	$ 0.2
Average common shares outstanding
Basic	1,740	1,801
Diluted	1,771	1,842

XML

Consolidated Comprehensive Income Statements (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Consolidated Comprehensive Income Statements
Net income	$ 2,704	$ 1,971
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	117	150
Change in net unrealized gains (losses) on available-for-sale securities	(410)	84
Pension, postretirement and other	5	0
Change in net debt valuation adjustment	451	9
Total other comprehensive income (loss)	163	243
Comprehensive income	2,867	2,214
Net income applicable to noncontrolling interests	36	41
Other comprehensive income (loss) applicable to noncontrolling interests	72	50
Comprehensive income applicable to Morgan Stanley	$ 2,759	$ 2,123

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Assets
Cash and due from banks	$ 29,073	$ 24,816
Interest bearing deposits with banks	22,980	21,348
Restricted cash	35,291	34,231
Trading assets at fair value ($163,158 and $169,735 were pledged to various parties)	273,044	298,282
Investment securities (includes $56,749 and $55,203 at fair value)	80,641	78,802
Securities purchased under agreements to resell	80,246	84,258
Securities borrowed	135,835	124,010
Customer and other receivables	66,835	56,187
Held for investment (net of allowance of $243 and $224)	95,124	92,953
Held for sale	14,011	11,173
Goodwill	6,706	6,597
Intangible assets (net of accumulated amortization of $2,817 and $2,730)	2,427	2,448
Other assets	16,282	16,628
Total assets	858,495	851,733
Liabilities
Deposits (includes $242 and $204 at fair value)	160,424	159,436
Trading liabilities at fair value	139,023	131,295
Securities sold under agreements to repurchase (includes $792 and $800 at fair value)	51,575	56,424
Securities loaned	13,556	13,592
Other secured financings (includes $3,423 and $3,863 at fair value)	10,275	11,271
Customer and other payables	194,924	191,510
Other liabilities and accrued expenses	14,265	17,157
Borrowings (includes $47,533 and $46,912 at fair value)	194,964	192,582
Total liabilities	779,006	773,267
Commitments and contingent liabilities
Equity
Preferred stock	8,520	8,520
Common stock, $0.01 par value: Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,773,934,393 and 1,788,086,805	20	20
Additional paid-in capital	23,260	23,545
Retained earnings	60,009	57,577
Employee stock trusts	2,907	2,907
Accumulated other comprehensive income (loss)	(3,406)	(3,060)
Common stock held in treasury at cost, $0.01 par value (264,959,586 and 250,807,174 shares)	(10,369)	(9,211)
Common stock issued to employee stock trusts	(2,907)	(2,907)
Total Morgan Stanley shareholders' equity	78,034	77,391
Noncontrolling interests	1,455	1,075
Total equity	79,489	78,466
Total liabilities and equity	$ 858,495	$ 851,733

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Consolidated Balance Sheets
Trading assets pledged to various parties	$ 163,158	$ 169,735
Investment securities at fair value	56,749	55,203
Allowance for loans held for investment	243	224
Intangible assets, accumulated amortization	2,817	2,730
Deposits at fair value	242	204
Securities sold under agreement to repurchase at fair value	792	800
Other secured financings at fair value	3,423	3,863
Borrowings at fair value	$ 47,533	$ 46,912
Common stock par value (per share)	$ 0.01	$ 0.01
Common stock, shares authorized	3,500,000,000	3,500,000,000
Common stock, shares issued	2,038,893,979	2,038,893,979
Common stock, shares outstanding	1,773,934,393	1,788,086,805
Common stock held in treasury, shares	264,959,586	250,807,174

XML

Consolidated Statements of Changes in Total Equity (Unaudited) - USD ($) $ in Millions	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Retained Earnings	Employee Stock Trusts	Accumulated Other Comprehensive Income (Loss)	Common Stock Held in Treasury at Cost	Common Stock Issued to Employee Stock Trusts	Non-controlling Interests
Balance at at Dec. 31, 2016	$ 77,177	$ 7,520	$ 20	$ 23,271	$ 53,679	$ 2,851	$ (2,643)	$ (5,797)	$ (2,851)	$ 1,127
Cumulative adjustment for accounting changes	10			45	(35)
Net income applicable to Morgan Stanley	1,930				1,930
Net income applicable to noncontrolling interests	41									41
Dividends	(465)				(465)
Shares issued under employee plans and related tax effects	373			(430)		186		803	(186)
Repurchases of common stock and employee tax withholdings	(1,161)							(1,161)
Net change in Accumulated other comprehensive income (loss)	243						193			50
Issuance of preferred stock	994	1,000		(6)
Other net increases (decreases)	(58)									(58)
Balance at at Mar. 31, 2017	79,084	8,520	20	22,880	55,109	3,037	(2,450)	(6,155)	(3,037)	1,160
Balance at at Dec. 31, 2017	78,466	8,520	20	23,545	57,577	2,907	(3,060)	(9,211)	(2,907)	1,075
Cumulative adjustment for accounting changes	(131)				306		(437)
Net income applicable to Morgan Stanley	2,668				2,668
Net income applicable to noncontrolling interests	36									36
Dividends	(542)				(542)
Shares issued under employee plans	425			(285)				710
Repurchases of common stock and employee tax withholdings	(1,868)							(1,868)
Net change in Accumulated other comprehensive income (loss)	163						91			72
Other net increases (decreases)	272									272
Balance at at Mar. 31, 2018	$ 79,489	$ 8,520	$ 20	$ 23,260	$ 60,009	$ 2,907	$ (3,406)	$ (10,369)	$ (2,907)	$ 1,455

XML

Consolidated Cash Flow Statements (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities
Net income	$ 2,704	$ 1,971
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Deferred income taxes	0	0
(Income) loss from equity method investments	(50)	(9)
Stock-based compensation expense	321	269
Depreciation and amortization	390	434
Net gain on sale of available-for-sale securities	0	(2)
Impairment charges	8	5
Provision for credit losses on lending activities	26	25
Other operating adjustments	5	(74)
Changes in assets and liabilities:
Trading assets, net of Trading liabilities	33,832	(12,838)
Securities borrowed	(11,825)	13,433
Securities loaned	(36)	3,090
Customer and other receivables and other assets	(13,019)	(1,687)
Customer and other payables and other liabilities	1,129	(3,556)
Securities purchased under agreements to resell	4,012	(2,868)
Securities sold under agreements to repurchase	(4,849)	1,897
Net cash provided by (used for) operating activities	12,648	90
Cash flows from investing activities
Other assets-Premises, equipment and software, net	(410)	(350)
Business dispositions, net of cash disposed	0	0
Changes in loans, net	(3,801)	(1,105)
Investment securities:
Purchases	(5,482)	(6,449)
Proceeds from sales	810	3,604
Proceeds from paydowns and maturities	2,125	2,071
Other investing activities	(164)	61
Net cash provided by (used for) investing activities	(6,922)	(2,168)
Cash flows from financing activities
Noncontrolling interests	(5)	(2)
Other secured financings	(2,101)	199
Deposits	988	(3,754)
Proceeds from:
Derivatives financing activities	0	48
Issuance of preferred stock, net of issuance costs	0	994
Issuance of Borrowings	15,370	18,433
Payments for:
Borrowings	(11,377)	(11,538)
Derivatives financing activities	0	0
Repurchases of common stock and employee tax withholdings	(1,868)	(1,161)
Cash dividends	(599)	(511)
Other financing activities	(45)	14
Net cash provided by (used for) financing activities	363	2,722
Effect of exchange rate changes on cash and cash equivalents	860	877
Net increase (decrease) in cash and cash equivalents	6,949	1,521
Cash and cash equivalents, at beginning of period	80,395	77,360
Cash and cash equivalents, at end of period	87,344	78,881
Cash and cash equivalents:
Cash and due from banks	29,073	22,081
Interest bearing deposits with banks	22,980	20,773
Restricted cash	35,291	36,027
Cash and cash equivalents, at end of period	87,344	78,881
Supplemental Disclosure of Cash Flow Information
Cash payments for interest	1,407	737
Cash payments for income taxes, net of refunds	$ 250	$ 262

XML

Introduction and Basis of Presentation

3 Months Ended

Mar. 31, 2018

Introduction and Basis of Presentation

Introduction and Basis of Presentation

1.Introduction and Basis of Presentation

The Firm

Morgan Stanley is a global financial services firm that maintains significant market positions in each of its business segments—Institutional Securities, Wealth Management and Investment Management. Morgan Stanley, through its subsidiaries and affiliates, provides a wide variety of products and services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals. Unless the context otherwise requires, the terms “Morgan Stanley” or the “Firm” mean Morgan Stanley (the “Parent Company”) together with its consolidated subsidiaries. See the “Glossary of Common Acronyms” for definitions of certain acronyms used throughout this Form 10-Q.

A description of the clients and principal products and services of each of the Firm’s business segments is as follows:

Institutional Securitiesprovides investment banking, sales and trading, lending and other services to corporations, governments, financial institutions, and high to ultra-high net worth clients. Investment banking services consist of capital raising and financial advisory services, including services relating to the underwriting of debt, equity and other securities, as well as advice on mergers and acquisitions, restructurings, real estate and project finance. Sales and trading services include sales, financing, prime brokerage and market-making activities in equity and fixed income products, including foreign exchange and commodities. Lending services include originating and/or purchasing corporate loans, commercial and residential mortgage lending, asset-backed lending, financing extended to equities and commodities customers, and loans to municipalities. Other activities include investments and research.

Wealth Managementprovides a comprehensive array of financial services and solutions to individual investors and small to medium-sized businesses and institutions covering brokerage and investment advisory services, financial and wealth planning services, annuity and insurance products, credit and other lending products, banking and retirement plan services.

Investment Management provides a broad range of investment strategies and products that span geographies, asset classes, and public and private markets to a diverse group of clients across institutional and intermediary channels. Strategies and products include equity, fixed income, liquidity and alternative/other products. Institutional clients include defined benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, third-party fund sponsors and corporations. Individual clients are serviced through intermediaries, including affiliated and non-affiliated distributors.

Basis of Financial Information

The unaudited consolidated financial statements (“financial statements”) are prepared in accordance with U.S. GAAP, which requires the Firm to make estimates and assumptions regarding the valuations of certain financial instruments, the valuation of goodwill and intangible assets, compensation, deferred tax assets, the outcome of legal and tax matters, allowance for credit losses and other matters that affect its financial statements and related disclosures. The Firm believes that the estimates utilized in the preparation of its financial statements are prudent and reasonable. Actual results could differ materially from these estimates. Intercompany balances and transactions have been eliminated. Certain reclassifications have been made to prior periods to conform to the current presentation.

The accompanying financial statements should be read in conjunction with the Firm’s financial statements and notes thereto included in the 2017 Form 10-K. Certain footnote disclosures included in the 2017 Form 10-K have been condensed or omitted from these financial statements as they are not required for interim reporting under U.S. GAAP. The financial statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for the fair presentation of the results for the interim period. The results of operations for interim periods are not necessarily indicative of results for the entire year.

Consolidation

The financial statements include the accounts of the Firm, its wholly owned subsidiaries and other entities in which the Firm has a controlling financial interest, including certain VIEs (see Note 12). For consolidated subsidiaries that are less than wholly owned, the third-party holdings of equity interests are referred to as noncontrolling interests. The net income attributable to noncontrolling interests for such subsidiaries is presented as Net income applicable to noncontrolling interests in the consolidated income statements (“income statements”). The portion of shareholders’ equity that is attributable to noncontrolling interests for such subsidiaries is presented as noncontrolling interests, a component of total equity, in the consolidated balance sheets (“balance sheets”).

For a discussion of the Firm’s involvement with VIEs and its significant regulated U.S. and international subsidiaries, see Notes 1 and 2 to the financial statements in the 2017 Form 10-K.

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Significant Accounting Policies

3 Months Ended

Mar. 31, 2018

Significant Accounting Policies

Significant Accounting Policies

2. Significant Accounting Policies

For a detailed discussion about the Firm’s significant accounting policies, see Note 2 to the financial statements in the 2017 Form 10-K.

During the three months endedMarch 31,2018 (“current quarter”), there were no significant revisions to the Firm’s significant accounting policies,other than the following and the accounting updates adopted.

Carried Interest

The Firm is entitled to receive performance-based fees (also referred to as incentive fees, and includes carried interest) when the return on assets under management exceeds certain benchmark returns or other performance targets. Beginning January 1, 2018, when the Firm earns carried interest from funds as specified performance thresholds are met, that carried interest and any related general or limited partner interest is accounted for under the equity method of accounting and measured based on the Firm’s claim on the NAV of the fund at the reporting date taking into account the distribution terms applicable to the interest held. Performance-based fees in the form of carried interest considered equity method investments are therefore outside the scope of the policies for revenue from contracts with customers discussed below. See Note 11 for information regarding general partner guarantees, which include potential obligations to return performance fee distributions previously received.

Accounting Updates Adopted

The Firm adopted the following accounting updates in the current quarter. Prior year quarter results are presented under previous policies. See Note 14 for a summary of the Retained earnings impacts of these and other minor adoptions effective this quarter.

Revenue from Contracts with Customers

On January 1, 2018, we adopted Revenue from Contracts with Customers using the modified retrospective method, which resulted in a net decrease to Retained earnings of $32million, net of tax. Prior period amounts were not restated.See Note 20 for new disclosures related to the adoption of this standard.

Our revised accounting policy in accordance with this adoption is effective January 1, 2018,and is discussed below.

Revenue Recognition

Revenues are recognized when the promised goods or services are delivered to our customers, in an amount that is based on the consideration the Firm expects to receive in exchange for those goods or services when such amounts are not probable of significant reversal.

• Investment Banking

Revenue from investment banking activities consists of revenues earned from underwriting primarily equity and fixed income securities and advisory fees for mergers, acquisitions, restructuring and advisory assignments.

Underwriting revenues are generally recognized on trade date if there is no uncertainty or contingency related to the amount to be paid. Underwriting costs are deferred and recognized in the relevant non-compensation expense line items when the related underwriting revenues are recorded.

Advisory fees are recognized as advice is provided to the client, based on the estimated progress of work and when the revenue is not probable of a significant reversal. Advisory costs are recognized as incurred in the relevant non-compensation expense line items, including when reimbursed.

• Commissions and Fees

Commission and fee revenues result from transaction-based arrangements in which the client is charged a fee for the execution of transactions. Such revenues primarily arise from transactions in equity securities; services related to sales and trading activities; and sales of mutual funds, alternative funds, futures, insurance products and options. Commission and fee revenues are recognized on trade date when the performance obligation is satisfied.

• Asset Management Revenues

Asset management, distribution and administration fees are generally based on related asset levels being managed, such as the AUM of a customer’s account, or the net asset value of a fund. These fees are generally recognized when services are performed and the fees become known. Management fees are reduced by estimated fee waivers and expense caps, if any, provided to the customer.

Performance-based fees not in the form of carried interest are recorded when the annual performance target is met and the revenue is not probable of a significant reversal. Performance-based fees in the form of carried interest are considered equity method investments and are therefore outside the scope of these policies for revenue from contracts with customers.

Sales commissions paid by the Firm in connection with the sale of certain classes of shares of its open-end mutual fund products are accounted for as deferred commission assets and amortized to expense over the expected life of the contract. The Firm periodically tests deferred commission assets for recoverability based on cash flows expected to be received in future periods. Other asset management and distribution costs are recognized as incurred in the relevant non-compensation expense line items.

• Other Items

Revenue from commodities-related contracts is recognized as the promised goods or services are delivered to the customer.

Receivables from contracts with customers are recognized in Customer and other receivables in the balance sheets when the underlying performance obligations have been satisfied and the Firm has the right per the contract to bill the customer. Contract assets are recognized in Other assets when the Firm has satisfied its performance obligations, but customer payment is conditional. Contract liabilities are recognized in Other liabilities when the Firm has collected payment from a customer based on the terms of the contract, but the underlying performance obligations are not yet satisfied.

For contracts with a term less than one year, incremental costs to obtain the contract are expensed as incurred. Revenues are not discounted when payment is expected within one year.

The Firm presents, net within revenues, all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Firm from a customer.

Derivatives and Hedging–Targeted Improvements to Accounting for Hedging Activities

This accounting update aims to better align the hedge accounting requirements with an entity’s risk management strategies and improve the financial reporting of hedging relationships. It also results in simplification of the application of hedge accounting related to the assessment of hedge effectiveness.

The Firm early adopted this accounting update in the first quarter of 2018. Upon adoption, the Firm recorded a cumulative catch-up adjustment, decreasing Retained earnings by $99 million, net of tax. This adjustment represents the cumulative effect of applying the new rules from the inception of certain fair value hedges of the interest rate risk of our borrowings, in particular the provision allowing only the benchmark rate component of coupon cash flows to be hedged.

Effective January 1, 2018, in accordance with this adoption, the Firm has updated its accounting policies to permit the hedged item in a fair value hedge of interest rate risk to be defined as including only the benchmark rate component of contractual coupon cash flows, and to allow for hedging part of the contractual term of the hedged instrument. The accounting policy also requires the entire gain or loss from revaluing hedges of net investments in foreign operations at the spot rate to be reported within AOCI.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

This accounting update, which the Firm elected to early adopt as of January 1, 2018, allows companies to reclassify from AOCI to Retained earnings the stranded tax effects associated with enactment of the Tax Act on December 22, 2017. These stranded tax effects resulted from the requirement to reflect the total amount of the remeasurement of and other adjustments to deferred tax assets and liabilities in 2017 income from continuing operations, regardless of whether the deferred taxes were originally recorded in AOCI. Accordingly, as of January 1, 2018, the Firm recorded a net increase to Retained earnings as a result of the reclassification of $443 million of such stranded tax effects previously recorded in AOCI, which were primarily the result of the remeasurement of deferred tax assets and liabilities associated with the change in tax rates.

Aside from the above treatment related to the Tax Act, the Firm releases stranded tax effects from AOCI into earnings once the related category of instruments or transactions giving rise to these effects no longer exists. For further detail on the tax effects reclassified, refer to Note 14to the financial statements.

XML

Fair Value Disclosures

3 Months Ended

Mar. 31, 2018

Fair Value Disclosures

Fair Value Disclosures

3. Fair Values

Fair Value Measurement

Assets and Liabilities Measured at Fair Value on a Recurring Basis
	At March 31, 2018
$ in millions	Level 1		Level 2		Level 3		Netting1		Total
Assets at fair value
Trading assets:
U.S. Treasury
and agency
securities	$	22,675	$	23,430	$	—	$	—	$	46,105
Other sovereign
government
obligations		18,185		9,371		7		—		27,563
State and municipal
securities		—		3,235		2		—		3,237
MABS		—		1,799		342		—		2,141
Loans and lending
commitments2		—		4,865		8,128		—		12,993
Corporate and other
debt		—		21,392		814		—		22,206
Corporate equities3		120,280		494		233		—		121,007
Derivative and other contracts:
Interest rate		989		176,030		1,250		—		178,269
Credit		—		6,971		362		—		7,333
Foreign exchange		45		53,504		29		—		53,578
Equity		1,165		44,506		3,871		—		49,542
Commodity and
other		383		6,908		4,576		—		11,867
Netting1		(1,665)		(216,759)		(1,581)		(47,436)		(267,441)
Total derivative and
other contracts		917		71,160		8,507		(47,436)		33,148
Investments4		482		372		1,012		—		1,866
Physical
commodities		—		205		—		—		205
Total trading assets4		162,539		136,323		19,045		(47,436)		270,471
Investment securities—
AFS		29,979		26,770		—		—		56,749
Intangible assets		—		3		—		—		3
Total assets
at fair value	$	192,518	$	163,096	$	19,045	$	(47,436)	$	327,223

	At March 31, 2018
$ in millions	Level 1		Level 2		Level 3		Netting1		Total
Liabilities at fair value
Deposits	$	—	$	198	$	44	$	—	$	242
Trading liabilities:
U.S. Treasury and
agency securities		20,182		32		—		—		20,214
Other sovereign
government
obligations		24,281		3,890		3		—		28,174
Corporate and other
debt		—		7,886		4		—		7,890
Corporate equities3		56,667		60		32		—		56,759
Derivative and other contracts:
Interest rate		1,043		159,538		580		—		161,161
Credit		—		7,456		392		—		7,848
Foreign exchange		31		53,408		62		—		53,501
Equity		1,054		46,616		2,856		—		50,526
Commodity and
other		543		5,680		2,916		—		9,139
Netting1		(1,665)		(216,759)		(1,581)		(36,184)		(256,189)
Total derivative and
other contracts		1,006		55,939		5,225		(36,184)		25,986
Total trading liabilities		102,136		67,807		5,264		(36,184)		139,023
Securities sold under
agreements to
repurchase		—		792		—		—		792
Other secured
financings		—		3,203		220		—		3,423
Borrowings		—		43,907		3,626		—		47,533
Total liabilities
at fair value	$	102,136	$	115,907	$	9,154	$	(36,184)	$	191,013

	At December 31, 2017
$ in millions	Level 1		Level 2		Level 3		Netting1		Total
Assets at fair value
Trading assets:
U.S. Treasury
and agency
securities	$	22,077	$	26,888	$	—	$	—	$	48,965
Other sovereign
government
obligations		20,234		7,825		1		—		28,060
State and municipal
securities		—		3,592		8		—		3,600
MABS		—		2,364		423		—		2,787
Loans and lending
commitments2		—		4,791		5,945		—		10,736
Corporate and other
debt		—		16,837		701		—		17,538
Corporate equities3		149,697		492		166		—		150,355
Derivative and other contracts:
Interest rate		472		178,704		1,763		—		180,939
Credit		—		7,602		420		—		8,022
Foreign exchange		58		53,724		15		—		53,797
Equity		1,101		40,359		3,530		—		44,990
Commodity and
other		1,126		5,390		4,147		—		10,663
Netting1		(2,088)		(216,764)		(1,575)		(47,171)		(267,598)
Total derivative and
other contracts		669		69,015		8,300		(47,171)		30,813
Investments4		297		523		1,020		—		1,840
Physical commodities		—		1,024		—		—		1,024
Total trading assets4		192,974		133,351		16,564		(47,171)		295,718
Investment securities—
AFS		27,522		27,681		—		—		55,203
Intangible assets		—		3		—		—		3
Total assets
at fair value	$	220,496	$	161,035	$	16,564	$	(47,171)	$	350,924

	At December 31, 2017
$ in millions	Level 1		Level 2		Level 3		Netting1		Total
Liabilities at fair value
Deposits	$	—	$	157	$	47	$	—	$	204
Trading liabilities:
U.S. Treasury and
agency securities		17,802		24		—		—		17,826
Other sovereign
government
obligations		24,857		2,016		—		—		26,873
Corporate and other
debt		—		7,141		3		—		7,144
Corporate equities3		52,653		82		22		—		52,757
Derivative and other contracts:
Interest rate		364		162,239		545		—		163,148
Credit		—		8,166		379		—		8,545
Foreign exchange		23		55,118		127		—		55,268
Equity		1,001		44,666		2,322		—		47,989
Commodity and
other		1,032		5,156		2,701		—		8,889
Netting1		(2,088)		(216,764)		(1,575)		(36,717)		(257,144)
Total derivative and
other contracts		332		58,581		4,499		(36,717)		26,695
Total trading liabilities		95,644		67,844		4,524		(36,717)		131,295
Securities sold under
agreements to
repurchase		—		650		150		—		800
Other secured
financings		—		3,624		239		—		3,863
Borrowings		—		43,928		2,984		—		46,912
Total liabilities
at fair value	$	95,644	$	116,203	$	7,944	$	(36,717)	$	183,074

MABS—Mortgage- and asset-backed securities

• For positions with the same counterparty that cross over the levels of the fair value hierarchy, both counterparty netting and cash collateral netting are included in the column titled “Netting.” Positions classified within the same level that are with the same counterparty are netted within that level. For further information on derivative instruments and hedging activities, see Note 4.
• For a further breakdown by type, see the following Loans and Lending Commitments at Fair Value table.
• For trading purposes, the Firm holds or sells short equity securities issued by entities in diverse industries and of varying sizes.
• Amounts exclude certain investments that are measured based on NAV per share, which are not classified in the fair value hierarchy. For additional disclosure about such investments, see “MeasuredBased on Net Asset Value” herein.

Loans and Lending Commitments at Fair Value
$ in millions	At March 31, 2018		At December 31, 2017
Corporate	$	9,346	$	8,358
Residential real estate		706		799
Wholesale real estate		2,941		1,579
Total	$	12,993	$	10,736

Unsettled Fair Value of Futures Contracts1
$ in millions	At March 31, 2018		At December 31, 2017
Customer and other receivables, net	$	714	$	831

• These contracts are primarily Level 1, actively traded, valued based on quoted prices from the exchange and are excluded from the previous recurring fair value tables.

For a description of the valuation techniques applied to the Firm’s major categories of assets and liabilities measured at fair value on a recurring basis, see Note 3 to the financial statements in the 2017 Form 10-K. During the current quarter, there were no significant revisions made to the Firm’s valuation techniques.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present additional information about Level 3 assets and liabilities measured at fair value on a recurring basis. Level 3 instruments may be hedged with instruments classified in Level 1 and Level 2. As a result, the realized and unrealized gains (losses) for assets and liabilities within the Level 3 category presented in the following tables do not reflect the related realized and unrealized gains (losses) on hedging instruments that have been classified by the Firm within the Level 1 and/or Level 2 categories.

Additionally, the unrealized gains (losses) during the period for assets and liabilities within the Level 3 category presented in the following tables herein may include changes in fair value during the period that were attributable to both observable and unobservable inputs. Total realized and unrealized gains (losses) are primarily included in Trading revenues in the income statements.

Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Current Quarter
$ in millions	Beginning Balance at December 31, 2017		Realized and Unrealized Gains (Losses)		Purchases1		Sales and Issuances2		Settlements1		Net Transfers		Ending Balance at March 31, 2018		Unrealized Gains (Losses)
Assets at fair value
Trading assets:
Other sovereign government obligations	$	1	$	—	$	7	$	—	$	—	$	(1)	$	7	$	—
State and municipal securities		8		—		1		(7)		—		—		2		—
MABS		423		77		64		(238)		(16)		32		342		2
Loans and lending commitments		5,945		28		3,740		(283)		(1,218)		(84)		8,128		(9)
Corporate and other debt		701		1		350		(243)		—		5		814		(1)
Corporate equities		166		—		166		(132)		—		33		233		(9)
Net derivative and other contracts3:
Interest rate		1,218		52		32		(41)		(81)		(510)		670		75
Credit		41		(107)		—		—		38		(2)		(30)		(109)
Foreign exchange		(112)		57		—		(31)		33		20		(33)		(9)
Equity		1,208		356		142		(799)		159		(51)		1,015		315
Commodity and other		1,446		217		13		(6)		(57)		47		1,660		149
Total net derivative and other contracts		3,801		575		187		(877)		92		(496)		3,282		421
Investments		1,020		44		21		(78)		—		5		1,012		22
Liabilities at fair value
Deposits	$	47	$	1	$	—	$	9	$	(1)	$	(10)	$	44	$	1
Trading liabilities:
Other sovereign government obligations		—		—		—		3		—		—		3		—
Corporate and other debt		3		—		(2)		1		—		2		4		—
Corporate equities		22		4		(5)		11		—		8		32		4
Securities sold under agreements to repurchase		150		—		—		—		—		(150)		—		—
Other secured financings		239		13		—		4		(10)		—		220		13
Borrowings		2,984		102		—		640		(83)		187		3,626		99

• Loan originations and consolidations of VIEs are included in Purchases and deconsolidations of VIEs are included in Settlements.
• Amounts related to entering into Net derivative and other contracts, Deposits, Other secured financings and Borrowings primarily represent issuances. Amounts for other line items primarily represent sales.
• Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts. Amounts are presented before counterparty netting.

Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Prior Year Quarter
$ in millions	Beginning Balance at December 31, 2016		Realized and Unrealized Gains (Losses)		Purchases1		Sales and Issuances2		Settlements1		Net Transfers		Ending Balance at March 31, 2017		Unrealized Gains (Losses)
Assets at fair value
Trading assets:
U.S. Treasury and agency securities	$	74	$	—	$	42	$	(241)	$	—	$	167	$	42	$	—
Other sovereign government obligations		6		—		61		(2)		—		—		65		—
State and municipal securities		250		—		2		(2)		—		(195)		55		—
MABS		217		7		39		(56)		(11)		20		216		(1)
Loans and lending commitments		5,122		53		757		(555)		(985)		87		4,479		39
Corporate and other debt		475		21		262		(142)		(1)		102		717		3
Corporate equities		446		(1)		41		(105)		—		(71)		310		3
Net derivative and other contracts3:
Interest rate		420		(114)		46		(24)		16		(46)		298		(127)
Credit		(373)		(25)		6		(5)		41		5		(351)		(33)
Foreign exchange		(43)		(36)		1		—		11		(4)		(71)		(20)
Equity		184		(144)		83		(121)		231		(16)		217		(81)
Commodity and other		1,600		127		6		(28)		(69)		(133)		1,503		34
Total net derivative and other contracts		1,788		(192)		142		(178)		230		(194)		1,596		(227)
Investments		958		8		62		(3)		(66)		2		961		8
Liabilities at fair value
Deposits	$	42	$	(1)	$	—	$	13	$	—	$	—	$	56	$	(1)
Trading liabilities:
Corporate and other debt		36		(1)		(119)		101		—		17		36		(1)
Corporate equities		35		12		(68)		26		—		21		2		—
Securities sold under agreements to repurchase		149		1		—		—		—		—		148		1
Other secured financings		434		(19)		—		13		(220)		(43)		203		(12)
Borrowings		2,014		(59)		—		270		(165)		(86)		2,092		(58)

• Loan originations and consolidations of VIEs are included in Purchases and deconsolidations of VIEs are included in Settlements.
• Amounts related to entering into Net derivative and other contracts, Deposits, Other secured financings and Borrowings primarily represent issuances. Amounts for other line items primarily represent sales.
• Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts.Amounts are presented before counterparty netting.

Significant Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements

The following disclosures provide information on the valuation techniques, significant unobservable inputs, and their ranges and averages for each major category of assets and liabilities measured at fair value on a recurring and nonrecurring basis with a significant Level 3 balance. The level of aggregation and breadth of products cause the range of inputs to be wide and not evenly distributed across the inventory. Further, the range of unobservable inputs may differ across firms in the financial services industry because of diversity in the types of products included in each firm’s inventory.For qualitative information on the sensitivity of the fair value measurements to changes in the significant unobservable inputs, see Note 3 to the financial statements in the 2017 Form 10-K. There are no predictable relationships between multiple significant unobservable inputs attributable to a given valuation technique. A single amount is disclosed when there is no significant difference between the minimum, maximum and average (weighted average or simple average/median).

Valuation Techniques and Sensitivity of Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements
	Predominant Valuation Techniques/	Range (Weighted Average or Simple Average/Median)1
$ in millions, except inputs	Significant Unobservable Inputs	At March 31, 2018	At December 31, 2017
Recurring Fair Value Measurement
Assets at fair value
MABS ($342 and $423)
Comparable pricing:	Comparable bond price	0 to 95 points (41 points)	0 to 95 points (26 points)
Loans and lending commitments ($8,128 and $5,945)
Margin loan model:	Discount rate	0% to 3% (1%)	0% to 3% (1%)
	Volatility skew	9% to 67% (28%)	7% to 41% (22%)
Comparable pricing:	Comparable loan price	55 to 101 points (97 points)	55 to 102 points (95 points)
Corporate and other debt ($814 and $701)
Comparable pricing:	Comparable bond price	3 to 100 points (70 points)	3 to 134 points (59 points)
Discounted cash flow:	Recovery rate	16%	6% to 36% (27%)
	Discount rate	7% to 20% (15%)	7% to 20% (14%)
Option model:	At the money volatility	15% to 52% (33%)	17% to 52% (52%)
Corporate equities ($233 and $166)
Comparable pricing:	Comparable equity price	100%	100%
Net derivative and other contracts2:
Interest rate ($670 and $1,218)
Option model:	Interest rate volatility skew	29% to 106% (40% / 43%)	31% to 97% (41% / 47%)
	Inflation volatility	23% to 61% (44% / 41%)	23% to 63% (44% / 41%)
	Interest rate curve	1% to 2% (2% / 2%)	2%
Credit ($(30) and $41)
Comparable pricing:	Cash synthetic basis	10 to 11 points (11 points)	12 to 13 points (12 points)
	Comparable bond price	0 to 75 points (25 points)	0 to 75 points (25 points)
Correlation model:	Credit correlation	39% to 67% (50%)	38% to 100% (48%)
Foreign exchange3 ($(33) and $(112))
Option model:	Interest rate - Foreign exchange correlation	55% to 57% (56% / 56%)	54% to 57% (56% / 56%)
	Interest rate volatility skew	29% to 106% (40% / 43%)	31% to 97% (41% / 47%)
	Contingency probability	90% to 95% (93% / 93%)	95% to 100% (96% / 95%)
Equity3 ($1,015 and $1,208)
Option model:	At the money volatility	14% to 55% (35%)	7% to 54% (32%)
	Volatility skew	-3% to 0% (-1%)	-5% to 0% (-1%)
	Equity - Equity correlation	5% to 99% (76%)	5% to 99% (76%)
	Equity - Foreign exchange correlation	-62% to 55% (-42%)	-55% to 40% (36%)
	Equity - Interest rate correlation	-7% to 48% (18% / 14%)	-7% to 49% (18% / 20%)
Commodity and other ($1,660 and $1,446)
Option model:	Forward power price	$2 to $212 ($30) per MWh	$4 to $102 ($31) per MWh
	Commodity volatility	5% to 167% (14%)	7% to 205% (17%)
	Cross-commodity correlation	5% to 99% (92%)	5% to 99% (92%)
Investments ($1,012 and $1,020)
Discounted cash flow:	WACC	9% to 15% (9%)	8% to 15% (9%)
	Exit multiple	8 to 10 times (10 times)	8 to 11 times (10 times)
Market approach:	EBITDA multiple	6 to 24 times (11 times)	6 to 25 times (11 times)
Comparable pricing:	Comparable equity price	35% to 100% (93%)	45% to 100% (92%)
Liabilities at Fair Value
Securities sold under agreements to repurchase ($ and $150)
Discounted cash flow:	Funding spread	N/A	107 to 126 bps (120 bps)
Other secured financings ($220 and $239)
Discounted cash flow:	Funding spread	54 to 93 bps (74 bps)	39 to 76 bps (57 bps)
Option model:	Volatility skew	-1%	-1%
	At the money volatility	10% to 40% (26%)	10% to 40% (26%)
Borrowings ($3,626 and $2,984)
Option model:	At the money volatility	5% to 33% (23%)	5% to 35% (22%)
	Volatility skew	-2% to 0% (0%)	-2% to 0% (0%)
	Equity - Equity correlation	45% to 95% (81%)	39% to 95% (86%)
	Equity - Foreign exchange correlation	-43% to 30% (-26%)	-55% to 10% (-18%)
Nonrecurring Fair Value Measurement
Assets at fair value
Loans ($1,057 and $924)
Corporate loan model:	Credit spread	94 to 432 bps (206 bps)	93 to 563 bps (239 bps)
Expected recovery:	Asset coverage	95% to 99% (95%)	95% to 99% (95%)

Points—Percentage of par

• Amounts represent weighted averages except where simple averages and the median of the inputs are provided when more relevant.
• CVA and FVA are included in the balance but excluded from the Valuation Technique(s) and Significant Unobservable Inputs. CVA is a Level 3 input when the underlying counterparty credit curve is unobservable. FVA is a Level 3 input in its entirety given the lack of observability of funding spreads in the principal market.
• Includes derivative contracts with multiple risks (i.e., hybrid products).

For a description of the Firm’s significant unobservable inputs and related sensitivity, see Note 3 to the financial statements in the 2017 Form 10-K. During the current quarter, there were no significant revisions made to the Firm’s significant unobservable inputs.

Measured Based on Net Asset Value

For a description of the Firm’s investments in private equity funds, real estate funds and hedge funds, which are measured based on NAV,see Note 3 to the financial statements in the 2017 Form 10-K.

	At March 31, 2018				At December 31, 2017
	Carrying				Carrying
$ in millions	Value		Commitment		Value		Commitment
Private equity	$	1,678	$	304	$	1,674	$	308
Real estate		796		181		800		183
Hedge1		99		4		90		4
Total	$	2,573	$	489	$	2,564	$	495

• Investments in hedge funds may be subject to initial period lock-up or gate provisions, which restrict an investor from withdrawingfrom the fund during a certain initial period or restrict the redemption amount on any redemption date, respectively.

Amounts in the previous table represent the Firm’s carrying value of general and limited partnership interests in fund investments, as well as any related performance fees in the form of carried interest. The carrying amounts are measured based on the NAV of the fund taking into account the distribution terms applicable to the interest held. This same measurement applies whether investments are accounted for under the equity method or fair value.

See Note 11 for information regarding general partner guarantees, which include potential obligations to return performance fee distributions previously received. See Note 19 for information regarding related performance fees at risk of reversal, including performance fees in the form of carried interest.

Nonredeemable Funds by Contractual Maturity
	Carrying Value at March 31, 2018
$ in millions	Private Equity		Real Estate
Less than 5 years	$	430	$	60
5-10 years		1,054		527
Over 10 years		194		209
Total	$	1,678	$	796

Fair Value Option

The Firm elected the fair value option for certain eligible instruments that are risk managed on a fair value basis to mitigate income statement volatility caused by measurement basis differences between the elected instruments and their associated risk management transactions or to eliminate complexities of applying certain accounting models.

Earnings Impact of Instruments under the Fair Value Option
			Interest
	Trading		Income		Net
$ in millions	Revenues		(Expense)		Revenues
Three Months Ended March 31, 2018
Borrowings	$	26	$	(102)	$	(76)

Three Months Ended March 31, 2017
Borrowings	$	(1,625)	$	(119)	$	(1,744)

Gains (losses) are mainly attributable to changes in foreign currency rates or interest rates or movements in the reference price or index.

The amounts in the previous table are included within Net revenues and do not reflect any gains or losses on related hedging instruments.

Gains (Losses) Due to Changes in Instrument-Specific Credit Risk
	Three Months Ended March 31,
		2018				2017
$ in millions		Trading Revenues		OCI		Trading Revenues		OCI
Borrowings	$	(15)	$	593	$	(4)	$	14
Securities sold under
agreements to repurchase		─		2		─		(3)
Loans and other debt1		81		─		(3)		─
Lending commitments2		2		─		─		─

$ in millions	At March 31, 2018		At December 31, 2017
Cumulative pre-tax DVA gain
(loss) recognized in AOCI	$	(1,236)	$	(1,831)

1. Loans and other debt instrument-specific credit gains (losses) were determined by excluding the non-credit components of gains and losses.

2. Gains (losses) on lending commitments were generally determined based on the difference between estimated expected client yields and contractual yields at each respective period-end.

Borrowings Measured at Fair Value on a Recurring Basis
	At		At
	March 31,		December 31,
$ in millions	2018		2017
Business Unit Responsible for Risk Management
Equity	$	25,181	$	25,903
Interest rates		19,744		19,230
Foreign exchange		622		666
Credit		855		815
Commodities		1,131		298
Total	$	47,533	$	46,912

Excess of Contractual Principal Amount Over Fair Value
	At		At
	March 31,		December 31,
$ in millions	2018		2017
Loans and other debt1	$	14,843	$	13,481
Loans 90 or more days past due
and/or on nonaccrual status1		11,834		11,253
Borrowings2		897		71

1. The majority of the difference between principal and fair value amounts for loans and other debt relates to distressed debt positions purchased at amounts well below par.

2.Borrowings do not include structured notes where the repayment of the initial principal amount fluctuates based on changes in a reference price or index.

Fair Value Loans on Nonaccrual Status
	At		At
	March 31,		December 31,
$ in millions	2018		2017
Nonaccrual loans	$	1,315	$	1,240
Nonaccrual loans 90 or more
days past due	$	654	$	779

The previous tables exclude non-recourse debt from consolidated VIEs, liabilities related to failed sales of financial assets, pledged commodities and other liabilities that have specified assets attributable to them.

Measured at Fair Value on a Nonrecurring Basis

Carrying and Fair Values

	At March 31, 2018
	Fair Value
$ in millions		Level 2		Level 31		Total
Assets
Loans	$	1,352	$	1,057	$	2,409
Other assets—Premises,
equipment and software		─		─		─
Total	$	1,352	$	1,057	$	2,409
Liabilities
Other liabilities and
accrued expenses—
Lending commitments	$	173	$	40	$	213
Total	$	173	$	40	$	213

	At December 31, 2017
	Fair Value
$ in millions		Level 2		Level 31		Total
Assets
Loans	$	1,394	$	924	$	2,318
Other assets—Other
investments		─		144		144
Total	$	1,394	$	1,068	$	2,462
Liabilities
Other liabilities and
accrued expenses—
Lending commitments	$	158	$	38	$	196
Total	$	158	$	38	$	196

• For significant Level 3 balances, refer to “Significant Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements” section herein for details of the significant unobservable inputs used for nonrecurring fair value measurement.

Gains (Losses) from Fair Value Remeasurements1
	Three Months Ended
	March 31,
$ in millions	2018		2017
Assets
Loans2	$	8	$	32
Other assets—Premises,
equipment and software3		(8)		(5)
Total	$	─	$	27
Liabilities
Other liabilities and
accrued expenses—
Lending commitments2	$	6	$	11
Total	$	6	$	11

• Gains and losses for Loans are classified in Other revenues. For other items, gains and losses are recorded in Other revenues if the item is held for sale, otherwise in Other expenses.
• Nonrecurring changes in the fair value of loans and lending commitments were calculated as follows: for the held for investment category, based on the value of the underlying collateral; and for the held for sale category, based on recently executed transactions, market price quotations, valuation models that incorporate market observable inputs where possible, such as comparable loan or debt prices and CDS spread levels adjusted for any basis difference between cash and derivative instruments, or default recovery analysis where such transactions and quotations are unobservable.
• Losses related to Other assets—Premises, equipment and software costs were determined using techniques that included a default recovery analysis and recently executed transactions.

Financial Instruments Not Measured at Fair Value

	At March 31, 2018
		Carrying	Fair Value
$ in millions		Value		Level 1		Level 2		Level 3		Total
Financial Assets
Cash and cash equivalents:
Cash and due
from banks	$	29,073	$	29,073	$	—	$	—	$	29,073
Interest bearing
deposits with
banks		22,980		22,980		—		—		22,980
Restricted cash		35,291		35,291		—		—		35,291
Investment securities—
HTM		23,892		11,327		11,270		322		22,919
Securities purchased
under agreements
to resell		80,246		—		80,175		16		80,191
Securities borrowed		135,835		—		135,781		—		135,781
Customer and other
receivables1		61,017		—		57,405		3,433		60,838
Loans2		109,135		—		25,687		83,146		108,833
Other assets		438		—		438		—		438
Financial Liabilities
Deposits	$	160,182	$	—	$	160,172	$	—	$	160,172
Securities sold
under agreements
to repurchase		50,783		—		50,763		1		50,764
Securities loaned		13,556		—		13,623		—		13,623
Other secured
financings		6,852		—		6,265		607		6,872
Customer and
other payables1		191,332		—		191,332		—		191,332
Borrowings		147,431		—		151,664		27		151,691

		At December 31, 2017
		Carrying	Fair Value
$ in millions		Value		Level 1		Level 2		Level 3		Total
Financial Assets
Cash and cash equivalents:
Cash and due
from banks	$	24,816	$	24,816	$	—	$	—	$	24,816
Interest bearing
deposits with
banks		21,348		21,348		—		—		21,348
Restricted cash		34,231		34,231		—		—		34,231
Investment securities—
HTM		23,599		11,119		11,673		289		23,081
Securities purchased
under agreements
to resell		84,258		—		78,239		5,978		84,217
Securities borrowed		124,010		—		124,018		1		124,019
Customer and other
receivables1		51,269		—		47,159		3,984		51,143
Loans2		104,126		—		21,290		82,928		104,218
Other assets		433		—		433		—		433
Financial Liabilities
Deposits	$	159,232	$	—	$	159,232	$	—	$	159,232
Securities sold
under agreements
to repurchase		55,624		—		51,752		3,867		55,619
Securities loaned		13,592		—		13,191		401		13,592
Other secured
financings		7,408		—		5,987		1,431		7,418
Customer and
other payables1		188,464		—		188,464		—		188,464
Borrowings		145,670		—		151,692		30		151,722

• Accrued interestand dividend receivables and payables where carrying value approximates fair value have been excluded.
• Amounts include loans measured at fair value on a nonrecurring basis.

Commitments—Held for Investment and Held for Sale
	Commitment		Fair Value
$ in millions	Amount1			Level 2		Level 3		Total
March 31, 2018	$	117,582	$	643	$	185	$	828
December 31, 2017		100,151		620		174		794

• For further discussion on lending commitments, see Note 11.

The previous tables exclude certain financial instruments such as equity method investments and all non-financial assets and liabilities such as the value of the long-term relationships with the Firm’s deposit customers. During the current quarter, there were no significant updates made to the Firm’s valuation techniques for financial instruments not measured at fair value.

XML

Derivative Instruments and Hedging Activities

3 Months Ended

Mar. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

4. Derivative Instruments and Hedging Activities

Derivative Fair Values
At March 31, 2018
	Assets
$ in millions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	804	$	1	$	—	$	805
Foreign exchange contracts		43		7		—		50
Total		847		8		—		855
Not designated as accounting hedges
Interest rate contracts		175,200		1,742		522		177,464
Credit contracts		5,352		1,981		—		7,333
Foreign exchange contracts		52,711		764		53		53,528
Equity contracts		25,320		—		24,222		49,542
Commodity and other contracts		10,295		—		1,572		11,867
Total		268,878		4,487		26,369		299,734
Total gross derivatives	$	269,725	$	4,495	$	26,369	$	300,589
Amounts offset
Counterparty netting		(198,282)		(3,424)		(22,787)		(224,493)
Cash collateral netting		(42,284)		(664)		—		(42,948)
Total in Trading assets	$	29,159	$	407	$	3,582	$	33,148
Amounts not offset1
Financial instruments collateral		(12,646)		—		—		(12,646)
Other cash collateral		(20)		—		—		(20)
Net amounts	$	16,493	$	407	$	3,582	$	20,482
Net amounts for which master netting or collateral agreements
are not in place or may not be legally enforceable							$	3,876

	Liabilities
$ in millions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	174	$	1	$	—	$	175
Foreign exchange contracts		107		22		—		129
Total		281		23		—		304
Not designated as accounting hedges
Interest rate contracts		159,276		1,267		443		160,986
Credit contracts		5,723		2,125		—		7,848
Foreign exchange contracts		52,493		835		44		53,372
Equity contracts		26,778		—		23,748		50,526
Commodity and other contracts		7,583		—		1,556		9,139
Total		251,853		4,227		25,791		281,871
Total gross derivatives	$	252,134	$	4,250	$	25,791	$	282,175
Amounts offset
Counterparty netting		(198,282)		(3,424)		(22,787)		(224,493)
Cash collateral netting		(31,280)		(416)		—		(31,696)
Total in Trading liabilities	$	22,572	$	410	$	3,004	$	25,986
Amounts not offset1
Financial instruments collateral		(4,966)		—		(374)		(5,340)
Other cash collateral		(38)		(26)		—		(64)
Net amounts	$	17,568	$	384	$	2,630	$	20,582
Net amounts for which master netting or collateral agreements
are not in place or may not be legally enforceable							$	4,366

At December 31, 2017
		Assets
$ in millions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	1,057	$	—	$	—	$	1,057
Foreign exchange contracts		57		6		—		63
Total		1,114		6		—		1,120
Not designated as accounting hedges
Interest rate contracts		177,948		1,700		234		179,882
Credit contracts		5,740		2,282		—		8,022
Foreign exchange contracts		52,878		798		58		53,734
Equity contracts		24,452		—		20,538		44,990
Commodity and other contracts		8,861		—		1,802		10,663
Total		269,879		4,780		22,632		297,291
Total gross derivatives	$	270,993	$	4,786	$	22,632	$	298,411
Amounts offset
Counterparty netting		(201,051)		(3,856)		(19,861)		(224,768)
Cash collateral netting		(42,141)		(689)		—		(42,830)
Total in Trading assets	$	27,801	$	241	$	2,771	$	30,813
Amounts not offset1
Financial instruments collateral		(12,363)		—		—		(12,363)
Other cash collateral		(4)		—		—		(4)
Net amounts	$	15,434	$	241	$	2,771	$	18,446
Net amounts for which master netting or collateral agreements
are not in place or may not be legally enforceable							$	3,154

		Liabilities
$ in millions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	67	$	1	$	—	$	68
Foreign exchange contracts		72		57		—		129
Total		139		58		—		197
Not designated as accounting hedges
Interest rate contracts		161,758		1,178		144		163,080
Credit contracts		6,273		2,272		—		8,545
Foreign exchange contracts		54,191		925		23		55,139
Equity contracts		27,993		—		19,996		47,989
Commodity and other contracts		7,117		—		1,772		8,889
Total		257,332		4,375		21,935		283,642
Total gross derivatives	$	257,471	$	4,433	$	21,935	$	283,839
Amounts offset
Counterparty netting		(201,051)		(3,856)		(19,861)		(224,768)
Cash collateral netting		(31,892)		(484)		—		(32,376)
Total in Trading liabilities	$	24,528	$	93	$	2,074	$	26,695
Amounts not offset1
Financial instruments collateral		(5,523)		—		(412)		(5,935)
Other cash collateral		(18)		(14)		—		(32)
Net amounts	$	18,987	$	79	$	1,662	$	20,728
Net amounts for which master netting or collateral agreements
are not in place or may not be legally enforceable							$	3,751

• Amounts relate to master netting agreements and collateral agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance.

See Note 3 for information related to the unsettled fair value of futures contracts not designated as accounting hedges, which are excluded from the tables above.

Derivative Notionals
At March 31, 2018
	Assets
$ in billions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	20	$	26	$	—	$	46
Foreign exchange contracts		5		—		—		5
Total		25		26		—		51
Not designated as accounting hedges
Interest rate contracts		4,449		7,472		3,477		15,398
Credit contracts		165		90		—		255
Foreign exchange contracts		2,223		89		8		2,320
Equity contracts		402		—		383		785
Commodity and other contracts		94		—		61		155
Total		7,333		7,651		3,929		18,913
Total gross derivatives	$	7,358	$	7,677	$	3,929	$	18,964

	Liabilities
$ in billions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	2	$	133	$	—	$	135
Foreign exchange contracts		4		2		—		6
Total		6		135		—		141
Not designated as accounting hedges
Interest rate contracts		4,614		7,074		1,181		12,869
Credit contracts		188		83		—		271
Foreign exchange contracts		2,184		98		14		2,296
Equity contracts		425		—		474		899
Commodity and other contracts		74		—		53		127
Total		7,485		7,255		1,722		16,462
Total gross derivatives	$	7,491	$	7,390	$	1,722	$	16,603

At December 31, 2017
	Assets
$ in billions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	20	$	46	$	—	$	66
Foreign exchange contracts		4		—		—		4
Total		24		46		—		70
Not designated as accounting hedges
Interest rate contracts		3,999		6,458		2,714		13,171
Credit contracts		194		100		—		294
Foreign exchange contracts		1,960		67		9		2,036
Equity contracts		397		—		334		731
Commodity and other contracts		86		—		72		158
Total		6,636		6,625		3,129		16,390
Total gross derivatives	$	6,660	$	6,671	$	3,129	$	16,460

	Liabilities
$ in billions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	2	$	102	$	—	$	104
Foreign exchange contracts		4		2		—		6
Total		6		104		—		110
Not designated as accounting hedges
Interest rate contracts		4,199		6,325		1,089		11,613
Credit contracts		226		80		—		306
Foreign exchange contracts		2,014		78		51		2,143
Equity contracts		394		—		405		799
Commodity and other contracts		68		—		61		129
Total		6,901		6,483		1,606		14,990
Total gross derivatives	$	6,907	$	6,587	$	1,606	$	15,100

The Firm believes that the notional amounts of the derivative contracts generally overstate its exposure.

For information related to offsetting of certain collateralized transactions, see Note 6. For a discussion of the Firm’s derivative instruments and hedging activities, see Note 4 to the financial statements in the 2017 Form 10-K.

Gains (Losses) on Accounting Hedges
		Three Months Ended
	March 31,
$ in millions		2018		2017
Fair Value Hedges - Recognized in Interest Expense
Interest rate contracts	$	(1,841)	$	(805)
Borrowings		1,852		717
Net Investment Hedges - Foreign exchange contracts
Recognized in OCI	$	(148)	$	(205)
Forward points excluded from hedge
effectiveness testing—Interest income	$	7	$	(9)

Borrowings under Fair Value Hedges
$ in millions		At March 31, 2018
Carrying amount of Borrowings currently or previously hedged	$	107,264
Basis adjustments included in carrying amount—
outstanding hedges	$	2,035

Hedge accounting basis adjustments for Borrowings primarily relate to outstanding hedges.

Trading Revenues by Product Type

	Three Months Ended
	March 31,
$ in millions		2018		2017
Interest rate contracts	$	871	$	594
Foreign exchange contracts		261		235
Equity security and index contracts1		1,877		1,641
Commodity and other contracts		435		189
Credit contracts		326		576
Total	$	3,770	$	3,235

• Dividend income is included within equity security and index contracts.

The previous table summarizes gains and losses included in Trading revenues in the income statements. These activities include revenues related to derivative and non-derivative financial instruments. The Firm generally utilizes financial instruments across a variety of product types in connection with its market-making and related risk management strategies. The trading revenues presented in the table are not representative of the manner in which the Firm manages its business activities and are prepared in a manner similar to the presentation of trading revenues for regulatory reporting purposes.

Credit Risk-Related Contingencies

In connection with certain OTC trading agreements, the Firm may be required to provide additional collateral or immediately settle any outstanding liability balances with certain counterparties in the event of a credit rating downgrade of the Firm.

The following table presents the aggregate fair value of certain derivative contracts that contain credit risk-related contingent features that are in a net liability position for which the Firm has posted collateral in the normal course of business.

Net Derivative Liabilities and Collateral Posted

		At		At
		March 31,		December 31,
$ in millions		2018		2017
Net derivative liabilities with credit
risk-related contingent features	$	17,213	$	20,675
Collateral posted		15,244		16,642

The additional collateral or termination payments that may be called in the event of a future credit rating downgrade vary by contract and can be based on ratings by either or both of Moody’s Investors Service, Inc. (“Moody’s”) and S&P Global Ratings.The following table shows the future potential collateral amounts and termination payments that could be called or required by counterparties or exchange and clearing organizations in the event of one-notch or two-notch downgrade scenarios based on the relevant contractual downgrade triggers.

Incremental Collateral or Termination Payments upon Potential Future Ratings Downgrade
		At
		March 31,
$ in millions		2018
One-notch downgrade	$	618
Two-notch downgrade		409
Bilateral downgrade agreements included
in the amounts above1	$	910

1.Amount representsarrangementsbetween the Firm and other parties where upon the downgrade of one party, the downgraded party must deliver collateral to the other party. These bilateral downgrade arrangements are used by the Firm to manage the risk of counterparty downgrades.

Credit Derivatives and Other Credit Contracts

The Firm enters into credit derivatives, principally CDS, under which it receives or provides protection against the risk of default on a set of debt obligations issued by a specified reference entity or entities. A majority of the Firm’s counterparties for these derivatives are banks, broker-dealers, and insurance and other financial institutions.

For further information on credit derivatives and other credit contracts, see Note 4 to the financial statements in the 2017 Form 10-K.

Protection Sold and Purchased with CDS
		At March 31, 2018
	Notional				Fair Value (Asset)/Liability
	Protection		Protection		Protection		Protection
$ in millions	Sold		Purchased		Sold		Purchased
Single name	$	133,209	$	152,446	$	(1,148)	$	1,580
Index and basket		103,531		98,822		(163)		5
Tranched index and basket		12,330		25,506		(276)		517
Total	$	249,070	$	276,774	$	(1,587)	$	2,102
Single name and non-tranched
index and basket
with identical underlying
reference obligations	$	233,572	$	250,376

		At December 31, 2017
		Notional			Fair Value (Asset)/Liability
	Protection		Protection		Protection		Protection
$ in millions	Sold		Purchased		Sold		Purchased
Single name	$	146,948	$	164,773	$	(1,277)	$	1,658
Index and basket		131,073		120,348		(341)		209
Tranched index and basket		11,864		24,498		(342)		616
Total	$	289,885	$	309,619	$	(1,960)	$	2,483
Single name and non-tranched
index and basket
with identical underlying
reference obligations	$	274,473	$	281,162

Fair value amounts as shown in the table below are on a gross basis prior to cash collateral or counterparty netting.In order to provide an indication of the current payment status or performance risk of the CDS, a breakdown of CDS based on the Firm’s internal credit ratings by investment grade and non-investment grade is provided.Internal credit ratings serve as the Credit Risk Management Department’s assessment of credit risk and the basis for a comprehensive credit limits framework used to control credit risk. The Firm uses quantitative models and judgment to estimate the various risk parameters related to each obligor.

Credit Ratings of Reference Obligation and Maturities of Credit Protection Sold

	At March 31, 2018
		Maximum Potential Payout/Notional										Fair Value
		Years to Maturity										(Asset)/
$ in millions		Less than 1		1-3		3-5		Over 5		Total		Liability
Single name CDS
Investment grade	$	33,332	$	35,927	$	17,621	$	10,658	$	97,538	$	(1,124)
Non-investment grade		12,994		13,871		6,813		1,993		35,671		(24)
Total single name CDS	$	46,326	$	49,798	$	24,434	$	12,651	$	133,209	$	(1,148)
Index and basket CDS
Investment grade	$	29,448	$	14,049	$	16,003	$	10,902	$	70,402	$	(811)
Non-investment grade		5,941		6,139		17,681		15,698		45,459		372
Total index and basket CDS	$	35,389	$	20,188	$	33,684	$	26,600	$	115,861	$	(439)
Total CDS sold	$	81,715	$	69,986	$	58,118	$	39,251	$	249,070	$	(1,587)
Other credit contracts		—		2		—		127		129		20
Total credit derivatives and other credit contracts	$	81,715	$	69,988	$	58,118	$	39,378	$	249,199	$	(1,567)

	At December 31, 2017
		Maximum Potential Payout/Notional										Fair Value
		Years to Maturity										(Asset)/
$ in millions		Less than 1		1-3		3-5		Over 5		Total		Liability
Single name CDS
Investment grade	$	39,721	$	42,591	$	18,157	$	8,872	$	109,341	$	(1,167)
Non-investment grade		14,213		16,293		6,193		908		37,607		(110)
Total single name CDS	$	53,934	$	58,884	$	24,350	$	9,780	$	146,948	$	(1,277)
Index and basket CDS
Investment grade	$	29,046	$	15,418	$	37,343	$	6,807	$	88,614	$	(1,091)
Non-investment grade		5,246		7,371		32,417		9,289		54,323		408
Total index and basket CDS	$	34,292	$	22,789	$	69,760	$	16,096	$	142,937	$	(683)
Total CDS sold	$	88,226	$	81,673	$	94,110	$	25,876	$	289,885	$	(1,960)
Other credit contracts		2		—		—		134		136		16
Total credit derivatives and other credit contracts	$	88,228	$	81,673	$	94,110	$	26,010	$	290,021	$	(1,944)

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Investment Securities

3 Months Ended

Mar. 31, 2018

Investment securities

Investment Securities

5.Investment Securities

The following tables present information about the Firm’s AFS securities, which are carried at fair value, and HTM securities, which are carried at amortized cost. The net unrealized gains or losses on AFS securities are reported on an after-tax basis as a component of AOCI.

AFS and HTM Securities
		At March 31, 2018
$ in millions	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
AFS securities
U.S. government and agency
securities:
U.S. Treasury securities	$	30,032	$	—	$	833	$	29,199
U.S. agency securities1		22,084		32		504		21,612
Total U.S. government and
agency securities		52,116		32		1,337		50,811
Corporate and other debt:
Agency CMBS		1,302		2		59		1,245
Non-agency CMBS		857		2		17		842
Corporate bonds		1,346		—		28		1,318
CLO		351		1		—		352
FFELP student loan ABS2		2,173		15		7		2,181
Total corporate and other debt		6,029		20		111		5,938
Total AFS securities		58,145		52		1,448		56,749
HTM securities
U.S. government and agency
securities:
U.S. Treasury securities		11,817		—		490		11,327
U.S. agency securities1		11,747		—		477		11,270
Total U.S. government and
agency securities		23,564		—		967		22,597
Corporate and other debt:
Non-agency CMBS		328		—		6		322
Total HTM securities		23,892		—		973		22,919
Total investment securities	$	82,037	$	52	$	2,421	$	79,668

		At December 31, 2017
$ in millions	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
AFS debt securities
U.S. government and agency
securities:
U.S. Treasury securities	$	26,842	$	—	$	589	$	26,253
U.S. agency securities1		22,803		28		247		22,584
Total U.S. government and
agency securities		49,645		28		836		48,837
Corporate and other debt:
Agency CMBS		1,370		2		49		1,323
Non-agency CMBS		1,102		—		8		1,094
Corporate bonds		1,379		5		12		1,372
CLO		398		1		—		399
FFELP student loan ABS2		2,165		15		7		2,173
Total corporate and other debt		6,414		23		76		6,361
Total AFS debt securities		56,059		51		912		55,198
AFS equity securities		15		—		10		5
Total AFS securities		56,074		51		922		55,203
HTM securities
U.S. government and agency
securities:
U.S. Treasury securities		11,424		—		305		11,119
U.S. agency securities1		11,886		7		220		11,673
Total U.S. government and
agency securities		23,310		7		525		22,792
Corporate and other debt:
Non-agency CMBS		289		1		1		289
Total HTM securities		23,599		8		526		23,081
Total investment securities	$	79,673	$	59	$	1,448	$	78,284

• U.S. agency securities consist mainly of agency-issued debt, agency mortgage pass-through pool securities and CMOs.
• Amounts are backed by a guarantee from the U.S. Department of Education of at least 95% of the principal balance and interest on such loans.

Investment Securities in an Unrealized Loss Position
		At March 31, 2018
		Less than 12 Months				12 Months or Longer				Total
$ in millions		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
AFS securities
U.S. government and agency securities:
U.S. Treasury securities	$	25,041	$	711	$	3,958	$	122	$	28,999	$	833
U.S. agency securities		12,634		402		2,417		102		15,051		504
Total U.S. government and agency securities		37,675		1,113		6,375		224		44,050		1,337
Corporate and other debt:
Agency CMBS		910		59		—		—		910		59
Non-agency CMBS		309		7		242		10		551		17
Corporate bonds		809		13		383		15		1,192		28
FFELP student loan ABS		1,006		7		—		—		1,006		7
Total corporate and other debt		3,034		86		625		25		3,659		111
Total AFS securities		40,709		1,199		7,000		249		47,709		1,448
HTM securities
U.S. government and agency securities:
U.S. Treasury securities		6,585		177		4,742		313		11,327		490
U.S. agency securities		4,404		119		6,866		358		11,270		477
Total U.S. government and agency securities		10,989		296		11,608		671		22,597		967
Corporate and other debt:
Non-agency CMBS		220		6		—		—		220		6
Total HTM securities		11,209		302		11,608		671		22,817		973
Total investment securities	$	51,918	$	1,501	$	18,608	$	920	$	70,526	$	2,421

		At December 31, 2017
		Less than 12 Months				12 Months or Longer				Total
$ in millions		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
AFS debt securities
U.S. government and agency securities:
U.S. Treasury securities	$	21,941	$	495	$	4,287	$	94	$	26,228	$	589
U.S. agency securities		12,673		192		2,513		55		15,186		247
Total U.S. government and agency securities		34,614		687		6,800		149		41,414		836
Corporate and other debt:
Agency CMBS		930		49		—		—		930		49
Non-agency CMBS		257		1		559		7		816		8
Corporate bonds		316		3		389		9		705		12
FFELP student loan ABS		984		7		—		—		984		7
Total corporate and other debt		2,487		60		948		16		3,435		76
Total AFS debt securities		37,101		747		7,748		165		44,849		912
AFS equity securities		—		—		5		10		5		10
Total AFS securities		37,101		747		7,753		175		44,854		922
HTM securities
U.S. government and agency securities:
U.S. Treasury securities		6,608		86		4,512		219		11,120		305
U.S. agency securities		2,879		24		7,298		196		10,177		220
Total U.S. government and agency securities		9,487		110		11,810		415		21,297		525
Corporate and other debt:
Non-agency CMBS		124		1		—		—		124		1
Total HTM securities		9,611		111		11,810		415		21,421		526
Total investment securities	$	46,712	$	858	$	19,563	$	590	$	66,275	$	1,448

The Firm believes there are no securities in an unrealized lossposition that are other-than-temporarily impaired afterperforming the analysis described in Note 2 to the financial statements in the 2017 Form 10-K. For AFS debt securities, the Firm does not intend to sell the securities and isnot likely to be required to sell the securities prior to recoveryof amortized cost basis. Furthermore, for AFS and HTM debt securities, the securities have not experienced credit losses asthe net unrealized losses reported in the previous table areprimarily due to higher interest rates since those securitieswere purchased.

See Note 12 for additional information on securities issued byVIEs, including U.S. agency mortgage-backed securities,non-agency CMBS,CLO and FFELP studentloan ABS.

Investment Securities by Contractual Maturity
		At March 31, 2018
$ in millions		Amortized Cost		Fair Value	Annualized Average Yield
AFS securities
U.S. government and agency securities:
U.S. Treasury securities:
Due within 1 year	$	6,153	$	6,132	0.9%
After 1 year through 5 years		19,385		18,906	1.6%
After 5 years through 10 years		4,494		4,161	1.4%
Total		30,032		29,199
U.S. agency securities:
Due within 1 year		43		42	1.1%
After 1 year through 5 years		1,899		1,883	1.0%
After 5 years through 10 years		1,555		1,506	1.8%
After 10 years		18,587		18,181	2.0%
Total		22,084		21,612
Total U.S. government and agency
securities		52,116		50,811	1.6%
Corporate and other debt:
Agency CMBS:
Due within 1 year		19		19	1.3%
After 1 year through 5 years		431		430	1.3%
After 5 years through 10 years		47		47	1.2%
After 10 years		805		749	1.6%
Total		1,302		1,245
Non-agency CMBS:
After 5 years through 10 years		36		35	2.5%
After 10 years		821		807	1.9%
Total		857		842
Corporate bonds:
Due within 1 year		97		97	1.6%
After 1 year through 5 years		1,175		1,150	2.4%
After 5 years through 10 years		74		71	2.5%
Total		1,346		1,318
CLO:
After 5 years through 10 years		153		153	1.5%
After 10 years		198		199	2.4%
Total		351		352
FFELP student loan ABS:
After 1 year through 5 years		48		47	0.8%
After 5 years through 10 years		390		388	0.8%
After 10 years		1,735		1,746	1.1%
Total		2,173		2,181
Total corporate and other debt		6,029		5,938	1.6%
Total AFS securities		58,145		56,749	1.6%
HTM securities
U.S. government securities:
U.S. Treasury securities:
Due within 1 year		2,027		2,012	1.2%
After 1 year through 5 years		3,952		3,871	1.8%
After 5 years through 10 years		5,112		4,807	1.9%
After 10 years		726		637	2.3%
Total		11,817		11,327
U.S. agency securities:
After 5 years through 10 years		34		33	1.9%
After 10 years		11,713		11,237	2.6%
Total		11,747		11,270
Total U.S. government and agency
securities		23,564		22,597	2.2%
Corporate and other debt:
Non-agency CMBS:
After 1 year through 5 years		92		92	3.6%
After 5 years through 10 years		217		212	3.9%
After 10 years		19		18	4.1%
Total corporate and other debt		328		322	3.8%
Total HTM securities		23,892		22,919	2.2%
Total investment securities	$	82,037	$	79,668	1.8%

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Collateralized Transactions

3 Months Ended

Mar. 31, 2018

Collateralized Transactions

Collateralized Transactions

6. Collateralized Transactions

The Firm enters into securities purchased under agreements to resell, securities sold under agreements to repurchase, securities borrowed and securities loaned transactions to, among other things, acquire securities to cover short positions and settle other securities obligations, to accommodate customers’ needs and to finance its inventory positions. For further discussion of the Firm’s collateralized transactions, see Note 6 to the financial statements in the 2017 Form 10-K.

Offsetting of Certain Collateralized Transactions
		At March 31, 2018
$ in millions		Gross Amounts		Amounts Offset		Net Amounts Presented		Amounts Not Offset1		Net Amounts
Assets
Securities purchased
under agreements
to resell	$	185,498	$	(105,252)	$	80,246	$	(74,843)	$	5,403
Securities borrowed		149,347		(13,512)		135,835		(132,271)		3,564
Liabilities
Securities sold
under agreements
to repurchase	$	156,827	$	(105,252)	$	51,575	$	(45,207)	$	6,368
Securities loaned		27,068		(13,512)		13,556		(13,336)		220
Net amounts for which master netting agreements are not in place or may not
be legally enforceable
Securities purchased under agreements to resell									$	5,212
Securities borrowed										669
Securities sold under agreements to repurchase										5,118
Securities loaned										194

		At December 31, 2017
$ in millions		Gross Amounts		Amounts Offset		Net Amounts Presented		Amounts Not Offset1		Net Amounts
Assets
Securities purchased
under agreements
to resell	$	199,044	$	(114,786)	$	84,258	$	(78,009)	$	6,249
Securities borrowed		133,431		(9,421)		124,010		(119,358)		4,652
Liabilities
Securities sold
under agreements
to repurchase	$	171,210	$	(114,786)	$	56,424	$	(48,067)	$	8,357
Securities loaned		23,014		(9,422)		13,592		(13,271)		321
Net amounts for which master netting agreements are not in place or may not
be legally enforceable
Securities purchased under agreements to resell									$	5,687
Securities borrowed										572
Securities sold under agreements to repurchase										6,945
Securities loaned										307

1.Amountsrelate to master netting agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance.

For information related to offsetting of derivatives, see Note 4.

Maturities and Collateral Pledged
Gross Secured Financing Balances by Remaining Contractual Maturity
		At March 31, 2018
$ in millions		Overnight and Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
Securities sold under
agreements to
repurchase	$	39,192	$	49,822	$	27,926	$	39,887	$	156,827
Securities loaned		16,869		603		2,045		7,551		27,068
Total included in the
offsetting disclosure	$	56,061	$	50,425	$	29,971	$	47,438	$	183,895
Trading liabilities―
Obligation to return
securities received
as collateral		18,136		—		610		—		18,746
Total	$	74,197	$	50,425	$	30,581	$	47,438	$	202,641

		At December 31, 2017
$ in millions		Overnight and Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
Securities sold under
agreements to
repurchase	$	41,332	$	66,593	$	28,682	$	34,603	$	171,210
Securities loaned		12,130		873		1,577		8,434		23,014
Total included in the
offsetting disclosure	$	53,462	$	67,466	$	30,259	$	43,037	$	194,224
Trading liabilities―
Obligation to return
securities received
as collateral		22,555		—		—		—		22,555
Total	$	76,017	$	67,466	$	30,259	$	43,037	$	216,779

Gross Secured Financing Balances by Class of Collateral Pledged
$ in millions		At March 31, 2018		At December 31, 2017
Securities sold under agreements to repurchase
U.S. government and agency securities	$	37,361	$	43,346
State and municipal securities		1,643		2,451
Other sovereign government obligations		78,844		87,141
ABS		2,204		1,130
Corporate and other debt		10,063		7,737
Corporate equities		25,893		28,497
Other		819		908
Total	$	156,827	$	171,210
Securities loaned
U.S. government and agency securities	$	6	$	81
Other sovereign government obligations		14,077		9,489
Corporate and other debt		28		14
Corporate equities		12,770		13,174
Other		187		256
Total	$	27,068	$	23,014
Total included in the offsetting disclosure	$	183,895	$	194,224
Trading liabilities―Obligation to return securities received as collateral
Corporate equities	$	18,746	$	22,555
Total	$	202,641	$	216,779

Assets Pledged

The Firm pledges its trading assets and loans to collateralize securities sold under agreements to repurchase, securities loaned, other secured financings and derivatives. Counterparties may or may not have the right to sell or repledge the collateral.

Pledged financial instruments that can be sold or repledged by the secured party are identified as Trading assets (pledged to various parties) in the balance sheets.

Carrying Value of Assets Loaned or Pledged without
Counterparty Right to Sell or Repledge
$ in millions		At March 31, 2018		At December 31, 2017
Trading assets	$	34,590	$	31,324
Loans (gross of allowance for loan losses)		342		228
Total	$	34,932	$	31,552

Collateral Received

The Firm receives collateral in the form of securities in connection with securities purchased under agreements to resell, securities borrowed, securities-for-securities transactions, derivative transactions, customer margin loans and securities-based lending. In many cases, the Firm is permitted to sell or repledge these securities held as collateral and use the securities to secure securities sold under agreements to repurchase, to enter into securities lending and derivative transactions or for delivery to counterparties to cover short positions

Fair Value of Collateral Received with Right to Sell or Repledge
$ in millions		At March 31, 2018		At December 31, 2017
Collateral received with right to sell or repledge	$	597,886	$	599,244
Collateral that was sold or repledged		471,985		475,113

Customer Margin Lending and Other

$ in millions		At March 31, 2018		At December 31, 2017
Net customer receivables representing
margin loans	$	34,382	$	32,112

The Firm provides margin lending arrangements which allow theclient to borrow against the value of qualifying securities.Margin loans are included within Customer and other receivablesin the balance sheets. Under these agreements andtransactions,the Firm receives collateral, including U.S. governmentand agency securities, other sovereign governmentobligations,corporate and other debt, and corporate equities.Customer receivables generated from margin lending activitiesare collateralized by customer-owned securities held bythe Firm. The Firm monitors required margin levels andestablished credit terms daily and, pursuant to such guidelines,requires customers to deposit additional collateral, or reducepositions,when necessary.

For a further discussion of the Firm’s margin lending activities,see Note 6 to the financial statements in the2017 Form 10-K.

The Firm has additional secured liabilities. For a furtherdiscussion of other secured financings, see Note 10.

Restricted Cash and Segregated Securities
$ in millions		At March 31, 2018		At December 31, 2017
Restricted cash	$	35,291	$	34,231
Segregated securities1		18,917		20,549
Total	$	54,208	$	54,780

• Securities segregated under federal regulations for the Firm’s U.S. broker-dealers are sourced from Securities purchased under agreements to resell and Trading assets in the balance sheets.

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Loans and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2018

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Loans and Allowance for Credit Losses

7. Loans, Lending Commitments and Allowance for Credit Losses

Loans

The Firm’s loans held for investment are recorded at amortized cost, and its loans held for sale are recorded at the lower of cost or fair value in the balance sheets. For a further description of these loans, refer to Note 7 to the financial statements in the 2017 Form 10-K. See Note 3 for further information regarding Loans and lending commitments held at fair value. See Note 11 for details of current commitments to lend in the future.

Loans by Type
		At March 31, 2018
	Loans Held		Loans Held
$ in millions	for Investment		for Sale		Total Loans
Corporate loans	$	31,903	$	12,000	$	43,903
Consumer loans		26,877		—		26,877
Residential real estate loans		26,566		33		26,599
Wholesale real estate loans		10,021		1,978		11,999
Total loans, gross		95,367		14,011		109,378
Allowance for loan losses		(243)		—		(243)
Total loans, net	$	95,124	$	14,011	$	109,135
		At December 31, 2017
	Loans Held		Loans Held
$ in millions	for Investment		for Sale		Total Loans
Corporate loans	$	29,754	$	9,456	$	39,210
Consumer loans		26,808		—		26,808
Residential real estate loans		26,635		35		26,670
Wholesale real estate loans		9,980		1,682		11,662
Total loans, gross		93,177		11,173		104,350
Allowance for loan losses		(224)		—		(224)
Total loans, net	$	92,953	$	11,173	$	104,126

Loans by Interest Rate Type
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Fixed	$	14,252	$	13,339
Floating or adjustable		94,883		90,787
Total loans, net	$	109,135	$	104,126

Loans to Non-U.S. Borrowers
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Loans, net	$	16,110	$	9,977

Credit Quality

For a further discussion about the Firm’s evaluation of credit transactions and monitoring and credit quality indicators, as well as factors considered by the Firm in determining the allowance for loan losses and impairments, see Notes 2 and 7 to the financial statements in the 2017 Form 10-K.

Loans Held for Investment before Allowance by Credit Quality
		At March 31, 2018
$ in millions	Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
Pass	$	31,327	$	26,872	$	26,492	$	9,126	$	93,817
Special mention		162		5		—		460		627
Substandard		405		—		74		435		914
Doubtful		9		—		—		—		9
Loss		—		—		—		—		—
Total	$	31,903	$	26,877	$	26,566	$	10,021	$	95,367

		At December 31, 2017
$ in millions	Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
Pass	$	29,166	$	26,802	$	26,562	$	9,480	$	92,010
Special mention		188		6		—		200		394
Substandard		393		—		73		300		766
Doubtful		7		—		—		—		7
Loss		—		—		—		—		—
Total	$	29,754	$	26,808	$	26,635	$	9,980	$	93,177

The following loans and lending commitments have been evaluated for a specific allowance. All remaining loans and lending commitments are assessed under the inherent allowance methodology.

Impaired Loans and Lending Commitments before Allowance
		At March 31, 2018
			Residential
$ in millions	Corporate		Real Estate		Total
Loans
With allowance	$	15	$	—	$	15
Without allowance1		69		49		118
UPB		95		51		146
Lending Commitments
Without allowance1	$	226	$	—	$	226
		At December 31, 2017
			Residential
$ in millions	Corporate		Real Estate		Total
Loans
With allowance	$	16	$	—	$	16
Without allowance1		118		45		163
UPB		146		46		192
Lending Commitments
Without allowance1	$	199	$	—	$	199

• At March 31,2018 and December 31, 2017, no allowance was recorded for these loans and lending commitments as the present value of the expected future cash flows (or, alternatively, the observable market price of the instrument or the fair value of the collateral held) equaled or exceeded the carrying value.

Impaired Loans and Allowance by Region
		At March 31, 2018
$ in millions	Americas		EMEA		Asia		Total
Impaired loans	$	129	$	—	$	4	$	133
Allowance for loan losses		199	$	42	$	2	$	243
		At December 31, 2017
$ in millions	Americas		EMEA		Asia		Total
Impaired loans	$	160	$	9	$	10	$	179
Allowance for loan losses		194		27		3		224

Troubled Debt Restructurings
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Loans	$	52	$	51
Lending commitments		25		28
Allowance for loan losses and lending
commitments		6		10

Impaired loans and lending commitments classified as held for investment within corporate loans include TDRsas shown in the previous table. These restructurings typically include modifications of interest rates, collateral requirements, other loan covenants and payment extensions.

Allowance for Loan Losses Rollforward
$ in millions		Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
December 31, 2017	$	126	$	4	$	24	$	70	$	224
Provision (release)		6		—		(1)		14		19
Other		(1)		—		—		1		—
March 31, 2018	$	131	$	4	$	23	$	85	$	243
Inherent	$	126	$	4	$	23	$	85	$	238
Specific		5		—		—		—		5

$ in millions		Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
December 31, 2016	$	195	$	4	$	20	$	55	$	274
Recoveries		1		—		—		—		1
Provision (release)		13		—		—		9		22
March 31, 2017	$	209	$	4	$	20	$	64	$	297
Inherent	$	142	$	4	$	20	$	64	$	230
Specific		67		—		—		—		67

Allowance for Lending Commitments Rollforward
$ in millions		Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
December 31, 2017	$	194	$	1	$	—	$	3	$	198
Provision (release)		7		—		—		—		7
Other		—		—		—		—		—
March 31, 2018	$	201	$	1	$	—	$	3	$	205
Inherent	$	200	$	1	$	—	$	3	$	204
Specific		1		—		—		—		1

$ in millions		Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
December 31, 2016	$	185	$	1	$	—	$	4	$	190
Provision (release)		3		—		—		—		3
March 31, 2017	$	188	$	1	$	—	$	4	$	193
Inherent	$	186	$	1	$	—	$	4	$	191
Specific		2		—		—		—		2

Employee Loans
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Balance	$	3,687	$	4,185
Allowance for loan losses		(75)		(77)
Balance, net	$	3,612	$	4,108
Repayment term range, in years		1 to 20		1 to 20

Employee loans are granted in conjunction with a program established to retain and recruit certain employees, are full recourse and generally require periodic repayments. These loans are recorded in Customer and other receivables in the balance sheets. The Firm establishes an allowance for loan amounts it does not consider recoverable, and the related provision is recorded in Compensation and benefits expense.

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Equity Method Investments

3 Months Ended

Mar. 31, 2018

Equity Method Investments and Joint Ventures

Equity Method Investments

8.Equity Method Investments

Overview

Equity method investments other than certain investments in funds are summarized below and included in Other assets in the balance sheets with related income or loss included in Other revenues in the income statements. See the Measured Based on Net Asset Value table in Note 3 for the carrying value of the Firm’s fund interests, which are comprised of general and limited partnership interests, as well as any related performance fees in the form of carried interest.

Equity Method Investment Balances
$ in millions	At March 31, 2018		At December 31, 2017
Investments	$	2,662	$	2,623

	Three Months Ended March 31,
$ in millions	2018		2017
Income (loss)	$	50	$	9

Japanese Securities Joint Venture

Included in the equity method investments is the Firm’s40% voting interest in Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. (“MUMSS”). Mitsubishi UFJ Financial Group, Inc. (“MUFG”)holds a 60% voting interest. The Firm accounts for its equity method investment in MUMSS within the Institutional Securities business segment.

	Three Months Ended March 31,
$ in millions	2018		2017
Income from investment in MUMSS	$	56	$	48

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Deposits

3 Months Ended

Mar. 31, 2018

Deposits [Abstract]

Deposits

9. Deposits

Deposits
		At March 31,		At December 31,
$ in millions		2018		2017
Savings and demand deposits	$	138,358	$	144,487
Time deposits		22,066		14,949
Total	$	160,424	$	159,436
Deposits subject to FDIC insurance	$	129,968	$	127,017
Time deposits that equal or
exceed the FDIC insurance limit	$	10	$	38

Time Deposit Maturities
$ in millions		At March 31, 2018
2018	$	13,164
2019		4,803
2020		2,257
2021		747
2022		418
Thereafter		677

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Borrowings and Other Secured Financings

3 Months Ended

Mar. 31, 2018

Borrowings and Other Secured Financings

Long-Term Borrowings and Other Secured Financings

10.Borrowings and Other Secured Financings

Borrowings
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Original maturities of one year or less	$	1,256	$	1,519
Original maturities greater than one year
Senior	$	183,712	$	180,835
Subordinated		9,996		10,228
Total	$	193,708	$	191,063
Total borrowings	$	194,964	$	192,582
Weighted average stated maturity, in years1		6.6		6.6

• Includes only borrowings with original maturities greater than one year.

Other Secured Financings

Other secured financings include the liabilities related to pledged commodities, certain ELNs, transfers of financial assets that are accounted for as financings rather than sales, consolidated VIEs where the Firm is deemed to be the primary beneficiary and other secured borrowings. These liabilities are generally payable from the cash flows of the related assets accounted for as Trading assets.See Note 12 for further information on other secured financings related to VIEs and securitization activities.

Other Secured Financings by Original Maturity and Type
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Original maturities:
Greater than one year	$	8,159	$	8,685
One year or less		1,406		2,034
Failed sales1		710		552
Total	$	10,275	$	11,271

• For more information on failed sales, see Note 12.

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Commitments, Guarantees and Contingencies

3 Months Ended

Mar. 31, 2018

Commitments, Guarantees and Contingencies [Abstract]

Commitments, Guarantees and Contingencies

11. Commitments, Guarantees and Contingencies

Commitments

The Firm’s commitments are summarized in the following table by years to maturity. Since commitments associated with these instruments may expire unused, the amounts shown do not necessarily reflect the actual future cash funding requirements.

		Years to Maturity at March 31, 2018
		Less
$ in millions		than 1		1-3		3-5		Over 5		Total
Lending:
Corporate	$	14,447	$	43,086	$	46,618	$	7,454	$	111,605
Consumer		6,598		—		8		3		6,609
Residential real
estate		5		64		33		259		361
Wholesale real
estate		183		833		25		—		1,041
Forward-starting
secured financing
receivables		85,399		—		—		1,177		86,576
Underwriting		344		—		—		—		344
Investment activities		527		96		62		230		915
Letters of credit and
other financial
guarantees		195		—		1		41		237
Total	$	107,698	$	44,079	$	46,747	$	9,164	$	207,688
Corporate lending commitments participated to third parties									$	6,877
Forward-starting secured financing receivables
settled within three business days									$	72,754

For a further description of these commitments, refer to Note 12 to the financial statements in the 2017 Form 10-K.

Guarantees

Obligations under Guarantee Arrangements at March 31, 2018
		Maximum Potential Payout/Notional
		Years to Maturity
$ in millions		Less than 1		1-3		3-5		Over 5		Total
Credit
derivatives	$	81,715	$	69,986	$	58,118	$	39,251	$	249,070
Other credit
contracts		—		2		—		127		129
Non-credit
derivatives		1,903,988		1,196,331		379,171		639,749		4,119,239
Standby letters of
credit and other
financial guarantees
issued1		806		1,114		1,272		4,903		8,095
Market value
guarantees		40		62		58		—		160
Liquidity
facilities		3,367		—		—		—		3,367
Whole loan sales
guarantees		—		1		1		23,223		23,225
Securitization
representations
and warranties		—		—		—		60,861		60,861
General partner
guarantees		33		52		324		27		436
								Carrying
								Amount
								(Asset)/		Collateral/
$ in millions								Liability		Recourse
Credit derivatives2							$	(1,587)	$	—
Other credit contracts								20		—
Non-credit derivatives2								45,314		—
Standby letters of credit and other
financial guarantees issued1								(182)		6,588
Market value guarantees								—		—
Liquidity facilities								(5)		5,475
Whole loan sales guarantees								8		—
Securitization representations and warranties								91		—
General partner guarantees								59		—

1. These amounts include certain issued standby letters of credit participated to third parties, totaling $0.7 billion of notional and collateral/recourse, due to the nature of the Firm’s obligations under these arrangements.

2. Carrying amounts of derivative contracts are shown on a gross basis prior to cash collateral or counterparty netting. For further information on derivative contracts, see Note 4.

The Firmalso has obligations under certain guarantee arrangements, including contracts and indemnification agreements, that contingently require the Firm to make payments to the guaranteed party based on changes in an underlying measure (such as an interest or foreign exchange rate, security or commodity price, an index, or the occurrence or non-occurrence of a specified event) related to an asset, liability or equity security of a guaranteed party. Also included as guarantees are contracts that contingently require the Firm to make payments to the guaranteed party based on another entity’s failure to perform under an agreement, as well as indirect guarantees of the indebtedness of others.

In certain situations, collateral may be held by the Firm forthose contracts that meet the definition of a guarantee. Generally,the Firm sets collateral requirements by counterparty sothat the collateral covers various transactions and productsand is not allocated specifically to individual contracts. Also,the Firm may recover amounts related to the underlying assetdelivered to the Firm under the derivative contract.

For more information on the nature of the obligation and related business activity for market value guarantees, liquidity facilities, whole loan sales guarantees and general partner guarantees related to certain investment management funds, as well as the other products in the previous table, see Note 12 to the financial statements in the 2017 Form 10-K.

Other Guarantees and Indemnities

In the normal course of business, the Firm provides guarantees and indemnifications in a variety of transactions. These provisions generally are standard contractual terms. Certain of these guarantees and indemnifications related to indemnities, exchange/clearinghouse member guarantees and merger and acquisition guarantees are described in Note 12 to the financial statements in the 2017 Form 10-K.

In addition, in the ordinary course of business, the Firm guarantees the debt and/or certain trading obligations (including obligations associated with derivatives, foreign exchange contracts and the settlement of physical commodities) of certain subsidiaries. These guarantees generally are entity or product specific and are required by investors or trading counterparties. The activities of the Firm’s subsidiaries covered by these guarantees (including any related debt or trading obligations) are included in the financial statements.

Finance Subsidiary

The Parent Company fully and unconditionally guarantees the securities issued by Morgan Stanley Finance LLC, a 100%-owned finance subsidiary.

Contingencies

Legal.    In addition to the matters described below, in the normal course of business, the Firm has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with its activities as a global diversified financial services institution. Certain of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. In some cases, the entities that would otherwise be the primary defendants in such cases are bankrupt or are in financial distress. These actions have included, but are not limited to, residential mortgage and credit crisis-related matters.

Over the last several years, the level of litigation and investigatory activity (both formal and informal) by governmental and self-regulatory agencies has increased materially in the financial services industry. As a result, the Firm expects that it will continue to be the subject of elevated claims for damages and other relief and, while the Firm has identified below any individual proceedings where the Firm believes a material loss to be reasonably possible and reasonably estimable, there can be no assurance that material losses will not be incurred from claims that have not yet been asserted or are not yet determined to be probable or possible and reasonably estimable losses.

The Firm contests liability and/or the amount of damages as appropriate in each pending matter. Where available information indicates that it is probable a liability had been incurred at the date of the financial statements and the Firm can reasonably estimate the amount of that loss, the Firm accrues the estimated loss by a charge to income.

In many proceedings and investigations, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss. In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is not always possible to reasonably estimate the size of the possible loss or range of loss.

For certain legal proceedings and investigations, the Firm cannot reasonably estimate such losses, particularly for proceedings and investigations where the factual record is being developed or contested or where plaintiffs or government entities seek substantial or indeterminate damages, restitution, disgorgement or penalties. Numerous issues may need to be resolved, including through potentially lengthy discovery and determination of important factual matters, determination of issues related to class certification and the calculation of damages or other relief, and by addressing novel or unsettled legal questions relevant to the proceedings or investigations in question, before a loss or additional loss or range of loss or additional range of loss can be reasonably estimated for a proceeding or investigation.

For certain other legal proceedings and investigations, the Firm can estimate reasonably possible losses, additional losses, ranges of loss or ranges of additional loss in excess of amounts accrued, but does not believe, based on current knowledge and after consultation with counsel, that such losses will have a material adverse effect on the Firm’s financial statements as a whole, other than the matters referred to in the following paragraphs.

On July 15, 2010, China Development Industrial Bank (“CDIB”) filed a complaint against the Firm, styled China Development Industrial Bank v. Morgan Stanley & Co. Incorporated et al., which is pending in the Supreme Court of the State of New York, New York County (“Supreme Court of NY”). The complaint relates to a $275 million CDS referencing the super senior portion of the STACK 2006-1 CDO. The complaint asserts claims for common law fraud, fraudulent inducement and fraudulent concealment and alleges that the Firm misrepresented the risks of the STACK 2006-1 CDO to CDIB, and that the Firm knew that the assets backing the CDO were of poor quality when it entered into the CDS with CDIB. The complaint seeks compensatory damages related to the approximately $228 million that CDIB alleges it has already lost under the CDS, rescission of CDIB’s obligation to pay an additional $12 million, punitive damages, equitable relief, fees and costs. On February 28, 2011, the court denied the Firm’s motion to dismiss the complaint. Based on currently available information, the Firm believes it could incur a loss in this action of up to approximately $240 million plus pre- and post-judgment interest, fees and costs.

On May 3, 2013, plaintiffs in Deutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al.filed a complaint against the Firm, certain affiliates, and other defendants in the Supreme Court of NY. The complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by the Firm to plaintiff was approximately $634 million. The complaint alleges causes of action against the Firm for common law fraud, fraudulent concealment, aiding and abetting fraud, negligent misrepresentation, and rescission and seeks, among other things, compensatory and punitive damages. On June 10, 2014, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. On June 20, 2017 the Appellate Division affirmed the lower court’s June 10, 2014 order. On October 3, 2017, the Appellate Division denied the Firm’s motion for leave to appeal to the New York Court of Appeals. At March 25, 2018, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $211 million, and the certificates had incurred actual losses of approximately $89 million. Based on currently available information, the Firm believes it could incur a loss in this action up to the difference between the $211 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against the Firm, or upon sale, plus pre- and post-judgment interest, fees and costs. The Firm may be entitled to be indemnified for some of these losses.

On July 8, 2013, U.S. Bank National Association, in its capacity as trustee, filed a complaint against the Firm styledU.S. Bank National Association, solely in its capacity as Trustee of the Morgan Stanley Mortgage Loan Trust 2007-2AX (MSM 2007-2AX) v. Morgan Stanley Mortgage Capital Holdings LLC, Successor-by-Merger to Morgan Stanley Mortgage Capital Inc. and GreenPoint Mortgage Funding, Inc., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $650 million, breached various representations and warranties. The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, unspecified damages and interest. On August 22, 2013, the Firm filed a motion to dismiss the complaint, which was granted in part and denied in part on November 24, 2014. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $240 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On December 30, 2013, Wilmington Trust Company, in its capacity as trustee for Morgan Stanley Mortgage Loan Trust 2007-12, filed a complaint against the Firm styled Wilmington Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC et al., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $516 million, breached various representations and warranties. The complaint seeks, among other relief, unspecified damages, attorneys’ fees, interest and costs. On February 28, 2014, the defendants filed a motion to dismiss the complaint, which was granted in part and denied in part on June 14, 2016. On July 11, 2017, the Appellate Division affirmed in part and reversed in part the trial court’s order that granted in part the Firm’s motion to dismiss. On September 26, 2017, the Appellate Division denied plaintiff’s motion for leave to appeal to the New York Court of Appeals. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $152 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus attorney’s fees, costs and interest, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On September 19, 2014, Financial Guaranty Insurance Company (“FGIC”) filed a complaint against the Firm in the Supreme Court of NY, styled Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. relating to a securitization issued by Basket of Aggregated Residential NIMS 2007-1 Ltd. The complaint asserts claims for breach of contract and alleges, among other things, that the net interest margin securities (“NIMS”) in the trust breached various representations and warranties. FGIC issued a financial guaranty policy with respect to certain notes that had an original balance of approximately $475 million. The complaint seeks, among other relief, specific performance of the NIMS breach remedy procedures in the transaction documents, unspecified damages, reimbursement of certain payments made pursuant to the transaction documents, attorneys’ fees and interest. On November 24, 2014, the Firm filed a motion to dismiss the complaint, which the court denied on January 19, 2017. On February 24, 2017, the Firm filed a notice of appeal of the denial of its motion to dismiss the complaint and perfected its appeal on November 22, 2017. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $126 million, the unpaid balance of these notes, plus pre- and post-judgment interest, fees and costs, as well as claim payments that FGIC has made and will make in the future.

On September 23, 2014, FGIC filed a complaint against the Firm in the Supreme Court of NY styled Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. relating to the Morgan Stanley ABS Capital I Inc. Trust 2007-NC4. The complaint asserts claims for breach of contract and fraudulent inducement and alleges, among other things, that the loans in the trust breached various representations and warranties and defendants made untrue statements and material omissions to induce FGIC to issue a financial guaranty policy on certain classes of certificates that had an original balance of approximately $876 million. The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, compensatory, consequential and punitive damages, attorneys’ fees and interest. On January 23, 2017, the court denied the Firm’s motion to dismiss the complaint. On February 24, 2017, the Firm filed a notice of appeal of the court’s order and perfected its appeal on November 22, 2017. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $277 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands from a certificate holder and FGIC that the Firm did not repurchase, plus pre- and post-judgment interest, fees and costs, as well as claim payments that FGIC has made and will make in the future. In addition, plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On January 23, 2015, Deutsche Bank National Trust Company, in its capacity as trustee, filed a complaint against the Firm styled Deutsche Bank National Trust Company solely in its capacity as Trustee of the Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 v. Morgan Stanley Mortgage Capital Holdings LLC as Successor-by-Merger to Morgan Stanley Mortgage Capital Inc., and Morgan Stanley ABS Capital I Inc., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $1.05 billion, breached various representations and warranties. The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, compensatory, consequential, rescissory, equitable and punitive damages, attorneys’ fees, costs and other related expenses, and interest. On December 11, 2015, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. On February 11, 2016, plaintiff filed a notice of appeal of that order, and the appeal was fully briefed on August 19, 2016. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $277 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands from a certificate holder and a monoline insurer that the Firm did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

In matters styled Case number 15/3637 and Case number 15/4353, the Dutch Tax Authority (“Dutch Authority”) is challenging, in the District Court in Amsterdam, the prior set-off by the Firm of approximately €124 million (approximately $152 million) plus accrued interest of withholding tax credits against the Firm’s corporation tax liabilities for the tax years 2007 to 2013. The Dutch Authority alleges that the Firm was not entitled to receive the withholding tax credits on the basis, inter alia, that a Firm subsidiary did not hold legal title to certain securities subject to withholding tax on the relevant dates. The Dutch Authority has also alleged that the Firm failed to provide certain information to the Dutch Authority and keep adequate books and records. A hearing took place in this matter on September 19, 2017. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately €124 million (approximately $152 million) plus accrued interest.On April 26, 2018, the District Court in Amsterdam issued a decision in matters styled Case number 15/3637 and Case number 15/4353 dismissing the Dutch Authority’s claims. The Dutch Authority has until June 7, 2018 to file any appeal.

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Variable Interest Entities and Securitization Activities

3 Months Ended

Mar. 31, 2018

Securitization Activities and Variable Interest Entities [Abstract]

Variable Interest Entity Disclosures

12.Variable Interest Entities and Securitization Activities

Overview

For a discussion of the Firm’s VIEs, the determination and structure of VIEs and securitization activities, see Note 13 to the financial statements in the 2017 Form 10-K.

Consolidated VIE

Assets and Liabilities by Type of Activity
		At March 31, 2018				At December 31, 2017
$ in millions	VIE Assets		VIE Liabilities		VIE Assets		VIE Liabilities
OSF	$	361	$	1	$	378	$	3
MABS1		234		197		249		210
Other2		2,718		1,131		1,174		250
Total	$	3,313	$	1,329	$	1,801	$	463

OSF—Other structured financings

• Amounts include transactions backed by residential mortgage loans, commercial mortgage loans and other types of assets, including consumer or commercial assets. The value of assets is determined based on the fair value of the liabilities and the interests owned by the Firm in such VIEsas the fair values for the liabilities and interests owned are more observable.
• Other primarily includes investment funds, certain operating entities, CLOs and structured transactions.At March 31, 2018, Other includes the consolidation of a fund managed by Mesa West Capital, LLC, which was acquired in the current quarter.

Assets and Liabilities by Balance Sheet Caption
	At March 31,		At December 31,
$ in millions	2018		2017
Assets
Cash and cash equivalents:
Cash and due from banks	$	103	$	69
Restricted cash		223		222
Trading assets at fair value		2,345		833
Customer and other receivables		21		19
Goodwill		18		18
Intangible assets		149		155
Other assets		454		485
Total	$	3,313	$	1,801
Liabilities
Other secured financings	$	1,305	$	438
Other liabilities and accrued
expenses		24		25
Total	$	1,329	$	463

Consolidated VIE assets and liabilities are presented in the previous tables after intercompany eliminations. Most assets owned by consolidated VIEs cannot be removed unilaterally by the Firm and are not generally available to the Firm. Most related liabilities issued by consolidated VIEs are non-recourse to the Firm. In certain other consolidated VIEs, the Firm either has the unilateral right to remove assets or provides additional recourse through derivatives such as total return swaps, guarantees or other forms of involvement.

In general, the Firm’s exposure to loss in consolidated VIEs is limited to losses that would be absorbed on the VIE net assets recognized in its financial statements, net of amounts absorbed by third-party variable interest holders.

Select Information Related to Consolidated VIEs
	At March 31,		At December 31,
$ in millions	2018		2017
Noncontrolling interests	$	494	$	189

Non-consolidated VIEs

The following tables include non-consolidated VIEs in which the Firm has determined that its maximum exposure to loss is greater than specific thresholds or meets certain other criteria and exclude exposure to loss from liabilities due to immateriality. Most of the VIEs included in the following tables are sponsored by unrelated parties; the Firm’s involvement generally is the result of its secondary market-making activities, securities held in its Investment securities portfolio (see Note 5) and certain investments in funds.

Non-consolidated VIEs
	At March 31, 2018
$ in millions	MABS		CDO		MTOB		OSF		Other
VIE assets (unpaid
principal balance)	$	76,854	$	14,445	$	5,439	$	3,307	$	19,959
Maximum exposure to loss
Debt and equity
interests	$	9,075	$	2,163	$	81	$	1,589	$	4,654
Derivative and
other contracts		—		—		3,367		—		2,317
Commitments,
guarantees
and other		882		902		—		161		327
Total	$	9,957	$	3,065	$	3,448	$	1,750	$	7,298
Carrying value of exposure to loss—Assets
Debt and equity
interests	$	9,075	$	2,163	$	51	$	1,185	$	4,654
Derivative and
other contracts		—		—		5		—		111
Total	$	9,075	$	2,163	$	56	$	1,185	$	4,765

	At December 31, 2017
$ in millions		MABS		CDO		MTOB		OSF		Other
VIE assets (unpaid
principal balance)	$	89,288	$	9,807	$	5,306	$	3,322	$	31,934
Maximum exposure to loss
Debt and equity
interests	$	10,657	$	1,384	$	80	$	1,628	$	4,730
Derivative and
other contracts		—		—		3,333		—		1,686
Commitments,
guarantees
and other		1,214		668		—		164		433
Total	$	11,871	$	2,052	$	3,413	$	1,792	$	6,849
Carrying value of exposure to loss—Assets
Debt and equity
interests	$	10,657	$	1,384	$	43	$	1,202	$	4,730
Derivative and
other contracts		—		—		5		—		184
Total	$	10,657	$	1,384	$	48	$	1,202	$	4,914

MTOB—Municipaltender option bonds

The Firm’s maximum exposure to loss presented in the previous table often differs from the carrying value of the variable interests held by the Firm. The maximum exposure to loss presented in the previous table is dependent on the nature of the Firm’s variable interest in the VIE and is limited to the notional amounts of certain liquidity facilities, other credit support, total return swaps, written put options, and the fair value of certain other derivatives and investments the Firm has made in the VIE. Liabilities issued by VIEs generally are non-recourse to the Firm. Where notional amounts are utilized in quantifying the maximum exposure related to derivatives, such amounts do not reflect fair value write-downs already recorded by the Firm.

The Firm’s maximum exposure to loss presented in the previous table does not include the offsetting benefit of any financial instruments that the Firm may utilize to hedge these risks associated with its variable interests. In addition, the Firm’s maximum exposure to loss presented in the previous table is not reduced by the amount of collateral held as part of a transaction with the VIE or any party to the VIE directly against a specific exposure to loss.

Non-consolidated VIEs Mortgage- and Asset-Backed Securitization Assets
		At March 31, 2018				At December 31, 2017
	UPB		Debt and Equity Interests		UPB		Debt and Equity Interests
$ in millions
Residential mortgages	$	13,564	$	782	$	15,636	$	1,272
Commercial mortgages		35,886		1,934		46,464		2,331
U.S. agency collateralized
mortgage obligations		14,405		3,150		16,223		3,439
Other consumer or
commercial loans		12,999		3,209		10,965		3,615
Total	$	76,854	$	9,075	$	89,288	$	10,657

Additional VIE Assets Owned
	At March 31,		At December 31,
$ in millions	2018		2017
VIE assets	$	12,314	$	11,318

These assets were either retained in connection with transfers of assets by the Firm, acquired in connection with secondary market-making activities, held as AFS securities in its Investment securities portfolio (see Note 5), or held as investments in funds. At March 31,2018 and December 31, 2017, these assets consisted of securities backed by residential mortgage loans, commercial mortgage loans or other consumer loans, such as credit card receivables, automobile loans and student loans, CDOs or CLOs, and investment funds.

The Firm’s primary risk exposure is to the securities issued by the SPEs owned by the Firm, with the highest risk on the most subordinate class of beneficial interests. These assets generally are included in Trading assets—Corporate and other debt, Trading assets—Investments or AFS securities within its Investment securities portfolio and are measured at fair value (see Note 3). The Firm does not provide additional support in these transactions through contractual facilities, such as liquidity facilities, guarantees or similar derivatives. The Firm’s maximum exposure to loss generally equals the fair value of the assets owned.

Transactions with SPEs in which the Firm, acting as principal, transferred financial assets with continuing involvement and received sales treatment are shown in the following tables.

Transfers of Assets with Continuing Involvement
		At March 31, 2018
	RML		CML		U.S. Agency CMO		CLN and Other1
$ in millions
SPE assets (UPB)2	$	14,978	$	59,607	$	14,751	$	16,823
Retained interests
Investment grade	$	—	$	324	$	825	$	5
Non-investment grade
(fair value)		1		107		—		308
Total	$	1	$	431	$	825	$	313
Interests purchased in the secondary market (fair value)
Investment grade	$	—	$	112	$	71	$	—
Non-investment grade		16		57		—		15
Total	$	16	$	169	$	71	$	15
Derivative assets (fair value)	$	—	$	—	$	—	$	191
Derivative liabilities (fair value)		—		—		—		119

		At December 31, 2017
	RML		CML		U.S. Agency CMO		CLN and Other1
$ in millions
SPE assets(UPB)2	$	15,555	$	62,744	$	11,612	$	17,060
Retained interests
Investment grade	$	—	$	293	$	407	$	4
Non-investment grade
(fair value)		1		98		—		478
Total	$	1	$	391	$	407	$	482
Interests purchased in the secondary market (fair value)
Investment grade	$	—	$	94	$	439	$	—
Non-investment grade		16		66		—		4
Total	$	16	$	160	$	439	$	4
Derivative assets (fair value)	$	1	$	—	$	—	$	226
Derivative liabilities (fair value)		—		—		—		85

RML—Residential mortgage loans

CML—Commercial mortgage loans

• Amounts include CLO transactions managed by unrelated third parties.
• Amounts include assets transferred by unrelated transferors.

	Fair Value at March 31, 2018
$ in millions	Level 2		Level 3		Total
Retained interests
Investment grade	$	831	$	5	$	836
Non-investment grade		13		403		416
Total	$	844	$	408	$	1,252
Interests purchased in the secondary market
Investment grade	$	182	$	1	$	183
Non-investment grade		52		36		88
Total	$	234	$	37	$	271
Derivative assets	$	50	$	141	$	191
Derivative liabilities		114		5		119

	Fair Value at December 31, 2017
$ in millions	Level 2		Level 3		Total
Retained interests
Investment grade	$	407	$	4	$	411
Non-investment grade		22		555		577
Total	$	429	$	559	$	988
Interests purchased in the secondary market
Investment grade	$	531	$	2	$	533
Non-investment grade		57		29		86
Total	$	588	$	31	$	619
Derivative assets	$	78	$	149	$	227
Derivative liabilities		81		4		85

Transferred assets are carried at fair value prior to securitization, and any changes in fair value are recognized in the income statements. The Firm may act as underwriter of the beneficial interests issued by these securitization vehicles. Investment banking underwriting net revenues are recognized in connection with these transactions. The Firm may retain interests in the securitized financial assets as one or more tranches of the securitization. These retained interests are generally carried at fair value in the balance sheets with changes in fair value recognized in the income statements.

Proceeds from New Securitization Transactions and Sales of Loans
	Three Months Ended
	March 31,
$ in millions		2018		2017
New transactions1	$	6,134	$	5,997
Retained interests		481		430
Sales of corporate loans to
CLO SPEs1, 2		94		179

• Net gains on new transactions and sales of corporate loans to CLO entities at the time of the sale were not material for all periods presented.
• Sponsored by non-affiliates.

The Firm has provided, or otherwise agreed to be responsible for, representations and warranties regarding certain assets transferred in securitization transactions sponsored by the Firm (see Note 11).

The Firm also enters into transactions in which it sells equity securities and contemporaneously enters into bilateral OTC equity derivatives with the purchasers of the securities, through which it retains the exposure to the securities as shown in the following table.

Assets Sold with Retained Exposure
	At March 31,		At December 31,
$ in millions	2018		2017
Carrying value of assets
derecognized at the time of
sale and gross cash proceeds	$	26,800	$	19,115
Fair value
Assets sold	$	26,566	$	19,138
Derivative assets recognized
in the balance sheets		2		176
Derivative liabilities recognized
in the balance sheets		236		153

Failed Sales

For transfers that fail to meet the accounting criteria for a sale, the Firm continues to recognize the assets in Trading assets at fair value, and the Firm recognizes the associated liabilities in Other secured financings at fair value in the balance sheets (see Note 10).

The assets transferred to certain unconsolidated VIEs in transactions accounted for as failed sales cannot be removed unilaterally by the Firm and are not generally available to the Firm. The related liabilities are also non-recourse to the Firm. In certain other failed sale transactions, the Firm has the right to remove assets or provides additional recourse through derivatives such as total return swaps, guarantees or other forms of involvement.

Carrying Value of Assets and Liabilities Related to Failed Sales
		At March 31, 2018				At December 31, 2017
$ in millions	Assets		Liabilities		Assets		Liabilities
Failed sales	$	710	$	710	$	552	$	552

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Regulatory Requirements

3 Months Ended

Mar. 31, 2018

Regulatory Requirements

Regulatory Requirements

13.Regulatory Requirements

Regulatory Capital Framework and Requirements

For a discussion of the Firm’s regulatory capital framework, see Note 14 to the financial statements in the 2017 Form 10-K.

The Firm is required to maintain minimum risk-based and leverage capital ratios under the regulatory capital requirements. A summary of the calculations of regulatory capital, RWA and transition provisions follows.

The Firm’s risk-based capital ratios for purposes of determining regulatory compliance are the lower of the capital ratios computed under (i) the standardized approaches for calculating credit risk and market risk RWA (“Standardized Approach”) and (ii) theapplicable advanced approaches for calculating credit risk, market risk and operational risk RWA (“Advanced Approach”).

Minimum risk-based capital ratio requirements apply to Common Equity Tier 1 capital, Tier 1 capital and Total capital. Certain adjustments to and deductions from capital are required for purposes of determining these ratios, such as goodwill, intangible assets, certain deferred tax assets, other amounts in AOCI and investments in the capital instruments of unconsolidated financial institutions.

In addition to the minimum risk-based capital ratio requirements, by 2019 the Firm will be subject to the following buffers:

• A greater than 2.5% Common Equity Tier 1 capital conservation buffer;

• The Common Equity Tier 1 G-SIB capital surcharge, currently at 3%; and

• Up to a 2.5% Common Equity Tier 1 CCyB, currently set by U.S. banking agencies at zero.

In 2017 and 2018, each of the buffersis 50% and 75%, respectively, of the 2019 requirement noted above. Failure to maintain the buffers will result in restrictions on the Firm’s ability to make capital distributions, including the payment of dividends and the repurchase of stock, and to pay discretionary bonuses to executive officers.

For a further discussion of the Firm’s calculation of risk-based capital ratios, see Note 14 to the financial statements in the 2017 Form 10-K.

The Firm’s Regulatory Capital and Capital Ratios

At March 31,2018 andDecember 31, 2017, the Firm’s ratios are based on the Standardized Approach rules.

Regulatory Capital
		At March 31, 2018
$ in millions		Amount	Ratio	Required Ratio1
Common Equity Tier 1 capital	$	60,568	15.5%	8.6%
Tier 1 capital		69,213	17.7%	10.1%
Total capital		79,363	20.3%	12.1%
Total RWA		390,390	N/A	N/A
Tier 1 leverage		69,213	8.2%	4.0%
Adjusted average assets2		846,868	N/A	N/A
SLR3		69,213	6.3%	5.0%
Supplementary leverage exposure		1,091,518	N/A	N/A
		At December 31, 2017
$ in millions		Amount	Ratio	Required Ratio1
Common Equity Tier 1 capital	$	61,134	16.5%	7.3%
Tier 1 capital		69,938	18.9%	8.8%
Total capital		80,275	21.7%	10.8%
Total RWA		369,578	N/A	N/A
Tier 1 leverage		69,938	8.3%	4.0%
Adjusted average assets2		842,270	N/A	N/A

• Percentages represent minimum required regulatory capital ratios under the transitional rules. Regulatory compliance was determined based on capital ratios calculated under the transitional rules until December 31, 2017.
• Adjusted average assets represent the denominator of the Tier 1 leverage ratio and are composed of the average daily balance of consolidated on-balance sheet assets under U.S. GAAP during the current quarter and the quarter ended December 31, 2017, respectively, adjusted for disallowed goodwill, intangible assets, certain deferred tax assets, certain investments in the capital instruments of unconsolidated financial institutions and other adjustments
• The SLR became effective as a capital standard on January 1, 2018.

U.S. Bank Subsidiaries’ Regulatory Capital and Capital Ratios

The Firm’s U.S. Bank Subsidiaries are subject to similar regulatory capital requirements as the Firm. Failure to meet minimum capital requirements can initiate certain mandatory and discretionary actions by regulators that, if undertaken, could have a direct material effect on the U.S. Bank Subsidiaries’ and the Firm’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, each of the U.S. Bank Subsidiaries must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.

Each U.S. depository institution subsidiary of the Firm must be well-capitalized in order for the Firm to continue to qualify as a financial holding company and to continue to engage in the broadest range of financial activities permitted for financial holding companies. Under regulatory capital requirements adopted by the U.S. federal banking agencies, U.S. depository institutions must maintain certain minimum capital ratios in order to be considered well-capitalized. At March 31,2018 and December 31, 2017, the Firm’s U.S. Bank Subsidiaries maintained capital at levels sufficiently in excess of the universally mandated well-capitalized requirements to address any additional capital needs and requirements identified by the U.S. federal banking regulators.

At March 31,2018 and December 31, 2017, the U.S. Bank Subsidiaries’ ratios are based on the Standardized Approach rules.

MSBNA’s Regulatory Capital
		At March 31, 2018
$ in millions		Amount	Ratio	Required Ratio1
Common Equity Tier 1 capital	$	15,514	19.7%	6.5%
Tier 1 capital		15,514	19.7%	8.0%
Total capital		15,785	20.1%	10.0%
Tier 1 leverage		15,514	11.8%	5.0%
SLR2			9.0%	6.0%
		At December 31, 2017
$ in millions		Amount	Ratio	Required Ratio1
Common Equity Tier 1 capital	$	15,196	20.5%	6.5%
Tier 1 capital		15,196	20.5%	8.0%
Total capital		15,454	20.8%	10.0%
Tier 1 leverage		15,196	11.8%	5.0%

MSPBNA’s Regulatory Capital
		At March 31, 2018
$ in millions		Amount	Ratio	Required Ratio1
Common Equity Tier 1 capital	$	6,382	24.2%	6.5%
Tier 1 capital		6,382	24.2%	8.0%
Total capital		6,425	24.4%	10.0%
Tier 1 leverage		6,382	9.7%	5.0%
SLR2			9.3%	6.0%
		At December 31, 2017
$ in millions		Amount	Ratio	Required Ratio1
Common Equity Tier 1 capital	$	6,215	24.4%	6.5%
Tier 1 capital		6,215	24.4%	8.0%
Total capital		6,258	24.6%	10.0%
Tier 1 leverage		6,215	9.7%	5.0%

• Ratios that are required in order to be considered well-capitalized for U.S. regulatory purposes. Regulatory compliance was determined based on capital ratios calculated under the transitional rules until December 31, 2017.
• The SLR became effective as a capital standard on January 1, 2018.

U.S. Broker-Dealer Regulatory Capital Requirements
MS&Co. Regulatory Capital
$ in millions		At March 31, 2018		At December 31, 2017
Net capital	$	12,661	$	10,142
Excess net capital		10,303		8,018

MS&Co. is a registered U.S. broker-dealer and registered futures commission merchant and, accordingly, is subject to the minimum net capital requirements of the SEC and the CFTC. MS&Co. has consistently operated with capital in excess of its regulatory capital requirements.

As an Alternative Net Capital broker-dealer, and in accordance with the market and credit risk standards of Appendix E of SEC Rule 15c3-1, MS&Co. is subject to minimum net capital and tentative net capital requirements. In addition, MS&Co. must notify the SEC if its tentative net capital falls below certain levels. At March 31,2018 and December 31, 2017, MS&Co. has exceeded its net capital requirement and has tentative net capital in excess of the minimum and notification requirements.

MSSB LLC Regulatory Capital
$ in millions		At March 31, 2018		At December 31, 2017
Net capital	$	2,919	$	2,567
Excess net capital		2,759		2,400

MSSB LLC is a registered U.S. broker-dealer and introducing broker for the futures business and, accordingly, is subject to the minimum net capital requirements of the SEC. MSSB LLC has consistently operated with capital in excess of its regulatory capital requirements.

Other Regulated Subsidiaries

MSIP, a London-based broker-dealer subsidiary, is subject to the capital requirements of the PRA, and MSMS, a Tokyo-based broker-dealer subsidiary, is subject to the capital requirements of the Financial Services Agency. MSIP and MSMS have consistently operated with capital in excess of their respective regulatory capital requirements.

Certain other U.S. and non-U.S. subsidiaries of the Firm are subject to various securities, commodities and banking regulations, and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. These subsidiaries have consistently operated with capital in excess of their local capital adequacy requirements.

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Total Equity

3 Months Ended

Mar. 31, 2018

Total Equity

Total Equity

14. Total Equity

Share Repurchases
		Three Months Ended
		March 31,
$ in millions		2018		2017
Repurchases of common stock
under the Firm's share
repurchase program	$	1,250	$	750

The Firm’s 2017 Capital Plan (“Capital Plan”) includes the share repurchase of up to $5.0 billion of outstanding common stock for the period beginning July 1, 2017 through June 30, 2018, an increase from $3.5 billion in the 2016 Capital Plan. Additionally, the Capital Plan includes quarterly common stock dividends of up to $0.25 per share.

Preferred Stock
	Three Months Ended
	March 31,
$ in millions	2018		2017
Dividends declared	$	93	$	90

For a description of Series A through Series K preferred stock issuances, see Note 15 to the financial statements in the 2017 Form 10-K. The Firm is authorized to issue 30 million shares of preferred stock. The preferred stock has a preference over the common stock upon liquidation. The Firm’s preferred stock qualifies as Tier 1 capital in accordance with regulatory capital requirements (see Note 13).

Preferred Stock Outstanding
$ in millions, except per share data	Shares Outstanding			Carrying Value
	At	Liquidation		At		At
	March 31,	Preference		March 31,		December 31,
	2018	per Share		2018		2017
Series
A	44,000	$	25,000	$	1,100	$	1,100
C1	519,882		1,000		408		408
E	34,500		25,000		862		862
F	34,000		25,000		850		850
G	20,000		25,000		500		500
H	52,000		25,000		1,300		1,300
I	40,000		25,000		1,000		1,000
J	60,000		25,000		1,500		1,500
K	40,000		25,000		1,000		1,000
Total				$	8,520	$	8,520

1. Series C is composed of the issuance of 1,160,791 shares of Series C Preferred Stock to MUFG for an aggregate purchase price of $911 million, less the redemption of 640,909 shares of Series C Preferred Stock of $503 million, which were converted to common shares of approximately $705 million.

Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)1
$ in millions	Foreign Currency Translation Adjustments		AFS Securities		Pension, Postretirement and Other		DVA		Total
December 31, 2017	$	(767)	$	(547)	$	(591)	$	(1,155)	$	(3,060)
Cumulative adjustment for
for accounting
changes2		(8)		(111)		(124)		(194)		(437)
OCI during the period		60		(410)		5		436		91
March 31, 2018	$	(715)	$	(1,068)	$	(710)	$	(913)	$	(3,406)

December 31, 2016	$	(986)	$	(588)	$	(474)	$	(595)	$	(2,643)
OCI during the period		107		84		—		2		193
March 31, 2017	$	(879)	$	(504)	$	(474)	$	(593)	$	(2,450)

• Amounts net of tax and noncontrolling interests.
• The cumulative adjustment for accounting changes is primarily the effect of the adoption of the accounting update Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This adjustment was recorded as of January 1, 2018 to reclassify certain income tax effects related to enactment of the Tax Act from AOCI to Retained earnings, primarily related to the remeasurement of deferred tax assets and liabilities resulting from the reduction in corporate income tax rate to 21%. See Note 2 for further information.

Components of Period Changes in OCI
	Three Months Ended
	March 31, 20181
$ in millions		Pre-tax Gain (Loss)		Income Tax Benefit (Provision)		After-tax Gain (Loss)		Non-controlling Interests		Net
Foreign currency translation adjustments
OCI activity	$	78	$	39	$	117	$	57	$	60
Reclassified to earnings		—		—		—		—		—
Net OCI	$	78	$	39	$	117	$	57	$	60
Change in net unrealized gains (losses) on AFS securities
OCI activity	$	(535)	$	125	$	(410)	$	—	$	(410)
Reclassified to earnings		—		—		—		—		—
Net OCI	$	(535)	$	125	$	(410)	$	—	$	(410)
Pension, postretirement and other
OCI activity	$	—	$	—	$	—	$	—	$	—
Reclassified to earnings		6		(1)		5		—		5
Net OCI	$	6	$	(1)	$	5	$	—	$	5
Change in net DVA
OCI activity	$	580	$	(140)	$	440	$	15	$	425
Reclassified to earnings		15		(4)		11		—		11
Net OCI	$	595	$	(144)	$	451	$	15	$	436

	Three Months Ended
	March 31, 2017
$ in millions		Pre-tax Gain (Loss)		Income Tax Benefit (Provision)		After-tax Gain (Loss)		Non-controlling Interests		Net
Foreign currency translation adjustments
OCI activity	$	43	$	107	$	150	$	43	$	107
Reclassified to earnings		—		—		—		—		—
Net OCI	$	43	$	107	$	150	$	43	$	107
Change in net unrealized gains (losses) on AFS securities
OCI activity	$	137	$	(52)	$	85	$	—	$	85
Reclassified to earnings		(2)		1		(1)		—		(1)
Net OCI	$	135	$	(51)	$	84	$	—	$	84
Change in net DVA
OCI activity	$	7	$	(1)	$	6	$	7	$	(1)
Reclassified to earnings		4		(1)		3		—		3
Net OCI	$	11	$	(2)	$	9	$	7	$	2

• Exclusive of 2018 cumulative adjustments related to the adoption of certain accounting updates in the current quarter. Refer to the table below and Note 2 for further information.

Cumulative Adjustments to Retained Earnings
	Three Months Ended
$ in millions	March 31, 2018
Revenue from contracts with customers	$	(32)
Derivatives and hedging‒targeted improvements
to accounting for hedging activities		(99)
Reclassification of certain tax effects from AOCI		443
Other1		(6)
Total	$	306
	Three Months Ended
$ in millions	March 31, 2017
Improvements to employee share-based payment
accounting2		(30)
Intra-entity transfers of assets other than inventory		(5)
Total	$	(35)

• Other includes the adoption of accounting updates related to Recognition and Measurement of Financial Assets and Financial Liabilities (other than the provision around presenting unrealized DVA in OCI which we early adopted in 2016) and Derecognition of Nonfinancial Assets. The impact of these adoptions on Retained earnings was not significant.
• See Note 2 to the 2017 Form 10-K for further information.

Amounts in the previous table represent cumulative adjustments related to the adoption of the accounting updates during the current and prior year quarters. See Note 2 for further information.

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Earnings per Common Share

3 Months Ended

Mar. 31, 2018

Earnings Per Share [Abstract]

Earnings Per Common Share

15.Earnings per Common Share

Calculation of Basic and Diluted EPS

		Three Months Ended
		March 31,
in millions, except for per share data		2018		2017
Basic EPS
Income from continuing operations	$	2,706	$	1,993
Income (loss) from discontinued operations		(2)		(22)
Net income		2,704		1,971
Net income applicable to noncontrolling interests		36		41
Net income applicable to Morgan Stanley		2,668		1,930
Preferred stock dividends and other		93		90
Earnings applicable to Morgan
Stanley common shareholders	$	2,575	$	1,840
Weighted average common shares outstanding		1,740		1,801
Earnings per basic common share
Income from continuing operations	$	1.48	$	1.03
Income (loss) from discontinued operations		—		(0.01)
Earnings per basic common share	$	1.48	$	1.02
Diluted EPS
Earnings applicable to Morgan
Stanley common shareholders	$	2,575	$	1,840
Weighted average common shares outstanding		1,740		1,801
Effect of dilutive securities:
Stock options and RSUs1		31		41
Weighted average common shares
outstanding and common stock equivalents		1,771		1,842
Earnings per diluted common share
Income from continuing operations	$	1.46	$	1.01
Income (loss) from discontinued operations		(0.01)		(0.01)
Earnings per diluted common share	$	1.45	$	1.00
Weighted average antidilutive RSUs and stock options
(excluded from the computation of diluted EPS)1		1		—

1. RSUs that are considered participating securities are treated as a separate class of securities in the computation of basic EPS, and, therefore, such RSUs are not included as incremental shares in the diluted EPS computation.

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Interest Income and Interest Expense

3 Months Ended

Mar. 31, 2018

Interest Income and Interest Expense

Interest Income and Interest Expense

16.Interest Income and Interest Expense

Interest income and Interest expense are classified in the income statements based on the nature of the instrument and related market conventions. When included as a component of the instrument’s fair value, interest is included within Trading revenues or Investments revenues. Otherwise, it is included within Interest income or Interest expense.

		Three Months Ended
		March 31,
$ in millions		2018		2017
Interest income
Investment securities	$	424	$	326
Loans		938		748
Securities purchased under agreements to resell
and Securities borrowed1		215		(18)
Trading assets, net of Trading liabilities		540		463
Customer receivables and Other2		743		446
Total interest income	$	2,860	$	1,965
Interest expense
Deposits	$	159	$	11
Borrowings		1,138		1,022
Securities sold under agreements to repurchase
and Securities loaned3		402		248
Customer payables and Other4		186		(87)
Total interest expense	$	1,885	$	1,194
Net interest	$	975	$	771

1. Includes fees paid on Securities borrowed.

2.Includes interest from Customer receivables, Restricted cash and Interest bearing deposits with banks.

3. Includes fees received on Securities loaned.

4. Includes fees received from prime brokerage customers for stock loan transactions incurred to cover customers’ short positions.

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Employee Benefit Plans

3 Months Ended

Mar. 31, 2018

Employee Benefit Plans

Employee Benefit Plans

17.Employee Benefit Plans

The Firm sponsors various retirement plans for the majority of its U.S. employees. The Firm provides certain other postretirement benefits, primarily health care and life insurance, to eligible U.S. employees.

Components of Net Periodic Benefit Expense (Income) for Pension and Other Postretirement Plans
		Three Months Ended
		March 31,
$ in millions		2018		2017
Service cost, benefits earned during the period	$	4	$	4
Interest cost on projected benefit obligation		34		37
Expected return on plan assets		(28)		(29)
Net amortization of prior service credit		—		(4)
Net amortization of actuarial loss		6		4
Net periodic benefit expense (income)	$	16	$	12

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Income Taxes

3 Months Ended

Mar. 31, 2018

Income Taxes

Income Taxes

17.Income Taxes

The Firm is under continuous examination by the IRS and other tax authorities in certain countries, such as Japan and the U.K., and in states in which it has significant business operations, such as New York. The Firm has established a liability for unrecognized tax benefits, and associated interest, if applicable (“tax liabilities”), that it believes is adequate in relation to the potential for additional assessments. Once established, the Firm adjusts such tax liabilities only when new information is available or when an event occurs necessitating a change.

During the fourth quarter of 2017, the Firm agreed to proposed adjustments associated with the expected closure of the IRS field audits for tax years 2006-2008. The Firm expects final closure of these tax years in the second quarter of 2018. The Firm is currently at various levels of field examination with respect to audits by the IRS, as well as New York State and New York City, for tax years 2009-2012 and 2007-2014, respectively.

The Firm believes that the resolution of the above tax matters will not have a material effect on the annual financial statements, although a resolution could have a material impact in the income statements and effective tax rate for any period in which such resolution occurs.

Furthermore, by the end of the first quarter of 2018, the Firm reached a conclusion with the U.K. tax authorities on certain issues through tax year 2010, the resolution of which did not have a material impact on the annual financial statements or effective tax rate.

See Note 11 regarding the Dutch Tax Authority’s challenge, in the District Court in Amsterdam (matters styled Case number15/3637 and Case number 15/4353), of the Firm’s entitlement to certain withholding tax credits which may impact the balance of unrecognized tax benefits.

It is reasonably possible that significant changes in the balance of unrecognized tax benefits occur within the next 12 months. At this time, however, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits and the impact on the Firm’s effective tax rate over the next 12 months

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Segment and Geographic Information

3 Months Ended

Mar. 31, 2018

Segment Reporting [Abstract]

Segment And Geographic Information

19.Segment and Geographic Information

Segment Information

For a discussion about the Firm’s business segments, see Note 21 to the financial statements in the 2017 Form 10-K.

Selected Financial Information by Business Segment
		Three Months Ended March 31, 2018
$ in millions		IS		WM		IM		I/E		Total
Total non-interest
revenues	$	6,195	$	3,305	$	718	$	(116)	$	10,102
Interest income		1,804		1,280		1		(225)		2,860
Interest expense		1,899		211		1		(226)		1,885
Net interest		(95)		1,069		—		1		975
Net revenues	$	6,100	$	4,374	$	718	$	(115)	$	11,077
Income from continuing
operations before
income taxes	$	2,112	$	1,160	$	148	$	—	$	3,420
Provision for income taxes		449		246		19		—		714
Income from continuing
operations		1,663		914		129		—		2,706
Income (loss) from
discontinued operations,
net of income taxes		(2)		—		—		—		(2)
Net income		1,661		914		129		—		2,704
Net income applicable to
noncontrolling interests		34		—		2		—		36
Net income applicable to
Morgan Stanley	$	1,627	$	914	$	127	$	—	$	2,668

		Three Months Ended March 31, 2017
$ in millions		IS		WM		IM		I/E		Total
Total non-interest
revenues	$	5,379	$	3,064	$	608	$	(77)	$	8,974
Interest income		1,124		1,079		1		(239)		1,965
Interest expense		1,351		85		—		(242)		1,194
Net interest		(227)		994		1		3		771
Net revenues	$	5,152	$	4,058	$	609	$	(74)	$	9,745
Income from continuing
operations before
income taxes	$	1,730	$	973	$	103	$	2	$	2,808
Provision for income taxes		459		326		30		—		815
Income from continuing
operations		1,271		647		73		2		1,993
Income (loss) from
discontinued operations,
net of income taxes		(22)		—		—		—		(22)
Net income		1,249		647		73		2		1,971
Net income applicable to
noncontrolling interests		35		—		6		—		41
Net income applicable to
Morgan Stanley	$	1,214	$	647	$	67	$	2	$	1,930

I/E–Intersegment Eliminations

Total Assets by Business Segment
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Institutional Securities	$	674,785	$	664,974
Wealth Management		177,603		182,009
Investment Management		6,107		4,750
Total1	$	858,495	$	851,733

• Parent assets have been fully allocated to the business segments.

Additional Information – Investment Management

Net Unrealized Performance-based Fees
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Net cumulative unrealized
performance-based fees
at risk of reversing	$	441	$	442

The Firm’s portion of net cumulative unrealized performance-based fees (for which the Firm is not obligated to pay compensation) are at risk of reversing if the fund performance falls below the stated investment management agreement benchmarks. See Note 11 for information regarding general partner guarantees, which include potential obligations to return performance fee distributions previously received.

Reduction of Fees due to Fee Waivers
		Three Months Ended March 31,
$ in millions		2018		2017
Fee waivers	$	18	$	23

The Firm waives a portion of its fees in the Investment Management business segment from certain registered money market funds that comply with the requirements of Rule 2a-7 of the Investment Company Act of 1940.

Geographic Information

For a discussion about the Firm’s geographic net revenues, see Note 21 to the financial statements in the 2017 Form 10-K.

Net Revenues by Region
	Three Months Ended
$ in millions	March 31, 2018		March 31, 2017
Americas	$	8,018	$	7,088
EMEA		1,708		1,489
Asia		1,351		1,168
Total	$	11,077	$	9,745

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Customer Contract Revenue Recognition

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customer [Abstract]

Revenues from Contracts with Customers

20.Revenues from Contracts with Customers

These disclosures are made in accordance with the adoption of the accounting update Revenue from Contracts with Customers, as such, they relate only to the subset of revenues generated from contracts with customers, which excludes certain revenues, such as revenues from financial instruments.

For a detailed discussion about the Firm’s revenue recognition accounting policies, see Note 2. For further segment and geographic information of the Firm’s total revenues, see Note 19.For a discussion about the Firm’s business segments, see Note 21 to the financial statements in the 2017 Form 10-K.

Customer Contract Revenue by Business Segment
		Three Months Ended March 31, 2018
$ in millions		IS		WM		IM		I/E		Total
Investment banking1	$	1,308	$	140	$	—	$	(19)	$	1,429
Commissions and fees		744		498		—		(69)		1,173
Asset management		110		2,495		626		(39)		3,192
Other customer contract
revenues2		59		59		—		(2)		116
Total revenues from contracts
with customers3	$	2,221	$	3,192	$	626	$	(129)	$	5,910

• Investment banking includes revenues from underwriting equity and fixed income securities and advisory fees.
• Includes Trading and Other revenues from contracts with customers.
• Includes $902 million in total consolidated revenue recognized in the current quarter from services performed over multiple periods related primarily to investment banking advisory fees, and distribution fees.

Customer Contract Revenue by Region
	Three Months Ended
$ in millions	March 31, 2018
Americas	$	4,738
EMEA		622
Asia		550
Total	$	5,910

Change in Revenue as a Result of Application of the New
Revenue Recognition Standard1
	Three Months Ended
$ in millions	March 31, 2018
Investment banking2	$	60
Commissions and fees		2
Asset management		9
Other customer contract revenues		12
Total change	$	83

• The accounting update requires, among other things, a gross presentation of certain costs that were previously netted against revenues. As a result, the Firm recorded an increase to net revenues and noncompensation expenses of $79 million, which was reported as follows: $72 million in the Institutional Securities business segment; $23 million in the Investment Management business segment; and $(16) million in Intersegment Eliminations related to intersegment activity.
• The effect of changing to a gross presentation on advisory fees and total underwriting fees within the Institutional Securities business segment in the current quarter was $15 million and $45 million, respectively.

Balance Sheet Amounts Related to Customer Contracts Revenue

	At		At
	March 31,		January 1,
$ in millions	2018		2018
Customer and other receivables	$	2,697	$	2,805

Other Liabilities—Contract Liabilities Rollforward
	Three Months Ended
$ in millions	March 31, 2018
January 1, 2018	$	155
Recognized contract liabilities		184
Contract liabilities recognized into revenue		(160)
March 31, 2018	$	179

Current quarter activity in contract liabilities relates primarily to Wealth Management advisory and managed account fees that are billed in advance and recognized into revenue as the underlying services are provided.

Certain Future Expected Revenues

	At March 31, 2018
$ in millions	2018		2019		2020		Thereafter		Total
Other customer
contract revenues1	$	89	$	118	$	95	$	310	$	612

• Primarily includes commodities-related contracts with customers.

The previous table presents expected revenues from current obligations to perform services in the future. It excludes the following: revenue subject to potentially significant reversal, revenues from contracts shorter than one year, and revenues from billings that are commensurate with the value of the services performed at each stage of the contract.

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Subsequent Events

3 Months Ended

Mar. 31, 2018

Subsequent Events

Subsequent Events

21.Subsequent Events

The Firm has evaluated subsequent events for adjustment to or disclosure in the financial statements through the date of this report and has not identified any recordable or disclosable events not otherwise reported in these financial statements or the notes thereto.

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Significant Accounting Policies (Policy)

3 Months Ended

Mar. 31, 2018

Significant Accounting Policies

Accounting Standards Adopted

Accounting Updates Adopted

The Firm adopted the following accounting updates in the current quarter. Prior year quarter results are presented under previous policies. See Note 14 for a summary of the Retained earnings impacts of these and other minor adoptions effective this quarter.

Revenue from Contracts with Customers

On January 1, 2018, we adopted Revenue from Contracts with Customers using the modified retrospective method, which resulted in a net decrease to Retained earnings of $32million, net of tax. Prior period amounts were not restated.See Note 20 for new disclosures related to the adoption of this standard.

Our revised accounting policy in accordance with this adoption is effective January 1, 2018,and is discussed below.

Revenue Recognition

Revenues are recognized when the promised goods or services are delivered to our customers, in an amount that is based on the consideration the Firm expects to receive in exchange for those goods or services when such amounts are not probable of significant reversal.

• Investment Banking

Revenue from investment banking activities consists of revenues earned from underwriting primarily equity and fixed income securities and advisory fees for mergers, acquisitions, restructuring and advisory assignments.

Underwriting revenues are generally recognized on trade date if there is no uncertainty or contingency related to the amount to be paid. Underwriting costs are deferred and recognized in the relevant non-compensation expense line items when the related underwriting revenues are recorded.

Advisory fees are recognized as advice is provided to the client, based on the estimated progress of work and when the revenue is not probable of a significant reversal. Advisory costs are recognized as incurred in the relevant non-compensation expense line items, including when reimbursed.

• Commissions and Fees

Commission and fee revenues result from transaction-based arrangements in which the client is charged a fee for the execution of transactions. Such revenues primarily arise from transactions in equity securities; services related to sales and trading activities; and sales of mutual funds, alternative funds, futures, insurance products and options. Commission and fee revenues are recognized on trade date when the performance obligation is satisfied.

• Asset Management Revenues

Asset management, distribution and administration fees are generally based on related asset levels being managed, such as the AUM of a customer’s account, or the net asset value of a fund. These fees are generally recognized when services are performed and the fees become known. Management fees are reduced by estimated fee waivers and expense caps, if any, provided to the customer.

Performance-based fees not in the form of carried interest are recorded when the annual performance target is met and the revenue is not probable of a significant reversal. Performance-based fees in the form of carried interest are considered equity method investments and are therefore outside the scope of these policies for revenue from contracts with customers.

Sales commissions paid by the Firm in connection with the sale of certain classes of shares of its open-end mutual fund products are accounted for as deferred commission assets and amortized to expense over the expected life of the contract. The Firm periodically tests deferred commission assets for recoverability based on cash flows expected to be received in future periods. Other asset management and distribution costs are recognized as incurred in the relevant non-compensation expense line items.

• Other Items

Revenue from commodities-related contracts is recognized as the promised goods or services are delivered to the customer.

Receivables from contracts with customers are recognized in Customer and other receivables in the balance sheets when the underlying performance obligations have been satisfied and the Firm has the right per the contract to bill the customer. Contract assets are recognized in Other assets when the Firm has satisfied its performance obligations, but customer payment is conditional. Contract liabilities are recognized in Other liabilities when the Firm has collected payment from a customer based on the terms of the contract, but the underlying performance obligations are not yet satisfied.

For contracts with a term less than one year, incremental costs to obtain the contract are expensed as incurred. Revenues are not discounted when payment is expected within one year.

The Firm presents, net within revenues, all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Firm from a customer.

Derivatives and Hedging–Targeted Improvements to Accounting for Hedging Activities

This accounting update aims to better align the hedge accounting requirements with an entity’s risk management strategies and improve the financial reporting of hedging relationships. It also results in simplification of the application of hedge accounting related to the assessment of hedge effectiveness.

The Firm early adopted this accounting update in the first quarter of 2018. Upon adoption, the Firm recorded a cumulative catch-up adjustment, decreasing Retained earnings by $99 million, net of tax. This adjustment represents the cumulative effect of applying the new rules from the inception of certain fair value hedges of the interest rate risk of our borrowings, in particular the provision allowing only the benchmark rate component of coupon cash flows to be hedged.

Effective January 1, 2018, in accordance with this adoption, the Firm has updated its accounting policies to permit the hedged item in a fair value hedge of interest rate risk to be defined as including only the benchmark rate component of contractual coupon cash flows, and to allow for hedging part of the contractual term of the hedged instrument. The accounting policy also requires the entire gain or loss from revaluing hedges of net investments in foreign operations at the spot rate to be reported within AOCI.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

This accounting update, which the Firm elected to early adopt as of January 1, 2018, allows companies to reclassify from AOCI to Retained earnings the stranded tax effects associated with enactment of the Tax Act on December 22, 2017. These stranded tax effects resulted from the requirement to reflect the total amount of the remeasurement of and other adjustments to deferred tax assets and liabilities in 2017 income from continuing operations, regardless of whether the deferred taxes were originally recorded in AOCI. Accordingly, as of January 1, 2018, the Firm recorded a net increase to Retained earnings as a result of the reclassification of $443 million of such stranded tax effects previously recorded in AOCI, which were primarily the result of the remeasurement of deferred tax assets and liabilities associated with the change in tax rates.

Aside from the above treatment related to the Tax Act, the Firm releases stranded tax effects from AOCI into earnings once the related category of instruments or transactions giving rise to these effects no longer exists. For further detail on the tax effects reclassified, refer to Note 14to the financial statements.

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Fair Value Disclosures (Tables)

3 Months Ended

Mar. 31, 2018

Fair Value Disclosures

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and Liabilities Measured at Fair Value on a Recurring Basis
	At March 31, 2018
$ in millions	Level 1		Level 2		Level 3		Netting1		Total
Assets at fair value
Trading assets:
U.S. Treasury
and agency
securities	$	22,675	$	23,430	$	—	$	—	$	46,105
Other sovereign
government
obligations		18,185		9,371		7		—		27,563
State and municipal
securities		—		3,235		2		—		3,237
MABS		—		1,799		342		—		2,141
Loans and lending
commitments2		—		4,865		8,128		—		12,993
Corporate and other
debt		—		21,392		814		—		22,206
Corporate equities3		120,280		494		233		—		121,007
Derivative and other contracts:
Interest rate		989		176,030		1,250		—		178,269
Credit		—		6,971		362		—		7,333
Foreign exchange		45		53,504		29		—		53,578
Equity		1,165		44,506		3,871		—		49,542
Commodity and
other		383		6,908		4,576		—		11,867
Netting1		(1,665)		(216,759)		(1,581)		(47,436)		(267,441)
Total derivative and
other contracts		917		71,160		8,507		(47,436)		33,148
Investments4		482		372		1,012		—		1,866
Physical
commodities		—		205		—		—		205
Total trading assets4		162,539		136,323		19,045		(47,436)		270,471
Investment securities—
AFS		29,979		26,770		—		—		56,749
Intangible assets		—		3		—		—		3
Total assets
at fair value	$	192,518	$	163,096	$	19,045	$	(47,436)	$	327,223

	At March 31, 2018
$ in millions	Level 1		Level 2		Level 3		Netting1		Total
Liabilities at fair value
Deposits	$	—	$	198	$	44	$	—	$	242
Trading liabilities:
U.S. Treasury and
agency securities		20,182		32		—		—		20,214
Other sovereign
government
obligations		24,281		3,890		3		—		28,174
Corporate and other
debt		—		7,886		4		—		7,890
Corporate equities3		56,667		60		32		—		56,759
Derivative and other contracts:
Interest rate		1,043		159,538		580		—		161,161
Credit		—		7,456		392		—		7,848
Foreign exchange		31		53,408		62		—		53,501
Equity		1,054		46,616		2,856		—		50,526
Commodity and
other		543		5,680		2,916		—		9,139
Netting1		(1,665)		(216,759)		(1,581)		(36,184)		(256,189)
Total derivative and
other contracts		1,006		55,939		5,225		(36,184)		25,986
Total trading liabilities		102,136		67,807		5,264		(36,184)		139,023
Securities sold under
agreements to
repurchase		—		792		—		—		792
Other secured
financings		—		3,203		220		—		3,423
Borrowings		—		43,907		3,626		—		47,533
Total liabilities
at fair value	$	102,136	$	115,907	$	9,154	$	(36,184)	$	191,013

	At December 31, 2017
$ in millions	Level 1		Level 2		Level 3		Netting1		Total
Assets at fair value
Trading assets:
U.S. Treasury
and agency
securities	$	22,077	$	26,888	$	—	$	—	$	48,965
Other sovereign
government
obligations		20,234		7,825		1		—		28,060
State and municipal
securities		—		3,592		8		—		3,600
MABS		—		2,364		423		—		2,787
Loans and lending
commitments2		—		4,791		5,945		—		10,736
Corporate and other
debt		—		16,837		701		—		17,538
Corporate equities3		149,697		492		166		—		150,355
Derivative and other contracts:
Interest rate		472		178,704		1,763		—		180,939
Credit		—		7,602		420		—		8,022
Foreign exchange		58		53,724		15		—		53,797
Equity		1,101		40,359		3,530		—		44,990
Commodity and
other		1,126		5,390		4,147		—		10,663
Netting1		(2,088)		(216,764)		(1,575)		(47,171)		(267,598)
Total derivative and
other contracts		669		69,015		8,300		(47,171)		30,813
Investments4		297		523		1,020		—		1,840
Physical commodities		—		1,024		—		—		1,024
Total trading assets4		192,974		133,351		16,564		(47,171)		295,718
Investment securities—
AFS		27,522		27,681		—		—		55,203
Intangible assets		—		3		—		—		3
Total assets
at fair value	$	220,496	$	161,035	$	16,564	$	(47,171)	$	350,924

	At December 31, 2017
$ in millions	Level 1		Level 2		Level 3		Netting1		Total
Liabilities at fair value
Deposits	$	—	$	157	$	47	$	—	$	204
Trading liabilities:
U.S. Treasury and
agency securities		17,802		24		—		—		17,826
Other sovereign
government
obligations		24,857		2,016		—		—		26,873
Corporate and other
debt		—		7,141		3		—		7,144
Corporate equities3		52,653		82		22		—		52,757
Derivative and other contracts:
Interest rate		364		162,239		545		—		163,148
Credit		—		8,166		379		—		8,545
Foreign exchange		23		55,118		127		—		55,268
Equity		1,001		44,666		2,322		—		47,989
Commodity and
other		1,032		5,156		2,701		—		8,889
Netting1		(2,088)		(216,764)		(1,575)		(36,717)		(257,144)
Total derivative and
other contracts		332		58,581		4,499		(36,717)		26,695
Total trading liabilities		95,644		67,844		4,524		(36,717)		131,295
Securities sold under
agreements to
repurchase		—		650		150		—		800
Other secured
financings		—		3,624		239		—		3,863
Borrowings		—		43,928		2,984		—		46,912
Total liabilities
at fair value	$	95,644	$	116,203	$	7,944	$	(36,717)	$	183,074

MABS—Mortgage- and asset-backed securities

• For positions with the same counterparty that cross over the levels of the fair value hierarchy, both counterparty netting and cash collateral netting are included in the column titled “Netting.” Positions classified within the same level that are with the same counterparty are netted within that level. For further information on derivative instruments and hedging activities, see Note 4.
• For a further breakdown by type, see the following Loans and Lending Commitments at Fair Value table.
• For trading purposes, the Firm holds or sells short equity securities issued by entities in diverse industries and of varying sizes.
• Amounts exclude certain investments that are measured based on NAV per share, which are not classified in the fair value hierarchy. For additional disclosure about such investments, see “MeasuredBased on Net Asset Value” herein.

Loans and Lending Commitments at Fair Value

Loans and Lending Commitments at Fair Value
$ in millions	At March 31, 2018		At December 31, 2017
Corporate	$	9,346	$	8,358
Residential real estate		706		799
Wholesale real estate		2,941		1,579
Total	$	12,993	$	10,736

Unsettled Fair Value of Futures Contracts

Unsettled Fair Value of Futures Contracts1
$ in millions	At March 31, 2018		At December 31, 2017
Customer and other receivables, net	$	714	$	831

• These contracts are primarily Level 1, actively traded, valued based on quoted prices from the exchange and are excluded from the previous recurring fair value tables.

Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Current Quarter
$ in millions	Beginning Balance at December 31, 2017		Realized and Unrealized Gains (Losses)		Purchases1		Sales and Issuances2		Settlements1		Net Transfers		Ending Balance at March 31, 2018		Unrealized Gains (Losses)
Assets at fair value
Trading assets:
Other sovereign government obligations	$	1	$	—	$	7	$	—	$	—	$	(1)	$	7	$	—
State and municipal securities		8		—		1		(7)		—		—		2		—
MABS		423		77		64		(238)		(16)		32		342		2
Loans and lending commitments		5,945		28		3,740		(283)		(1,218)		(84)		8,128		(9)
Corporate and other debt		701		1		350		(243)		—		5		814		(1)
Corporate equities		166		—		166		(132)		—		33		233		(9)
Net derivative and other contracts3:
Interest rate		1,218		52		32		(41)		(81)		(510)		670		75
Credit		41		(107)		—		—		38		(2)		(30)		(109)
Foreign exchange		(112)		57		—		(31)		33		20		(33)		(9)
Equity		1,208		356		142		(799)		159		(51)		1,015		315
Commodity and other		1,446		217		13		(6)		(57)		47		1,660		149
Total net derivative and other contracts		3,801		575		187		(877)		92		(496)		3,282		421
Investments		1,020		44		21		(78)		—		5		1,012		22
Liabilities at fair value
Deposits	$	47	$	1	$	—	$	9	$	(1)	$	(10)	$	44	$	1
Trading liabilities:
Other sovereign government obligations		—		—		—		3		—		—		3		—
Corporate and other debt		3		—		(2)		1		—		2		4		—
Corporate equities		22		4		(5)		11		—		8		32		4
Securities sold under agreements to repurchase		150		—		—		—		—		(150)		—		—
Other secured financings		239		13		—		4		(10)		—		220		13
Borrowings		2,984		102		—		640		(83)		187		3,626		99

• Loan originations and consolidations of VIEs are included in Purchases and deconsolidations of VIEs are included in Settlements.
• Amounts related to entering into Net derivative and other contracts, Deposits, Other secured financings and Borrowings primarily represent issuances. Amounts for other line items primarily represent sales.
• Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts. Amounts are presented before counterparty netting.

Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Prior Year Quarter
$ in millions	Beginning Balance at December 31, 2016		Realized and Unrealized Gains (Losses)		Purchases1		Sales and Issuances2		Settlements1		Net Transfers		Ending Balance at March 31, 2017		Unrealized Gains (Losses)
Assets at fair value
Trading assets:
U.S. Treasury and agency securities	$	74	$	—	$	42	$	(241)	$	—	$	167	$	42	$	—
Other sovereign government obligations		6		—		61		(2)		—		—		65		—
State and municipal securities		250		—		2		(2)		—		(195)		55		—
MABS		217		7		39		(56)		(11)		20		216		(1)
Loans and lending commitments		5,122		53		757		(555)		(985)		87		4,479		39
Corporate and other debt		475		21		262		(142)		(1)		102		717		3
Corporate equities		446		(1)		41		(105)		—		(71)		310		3
Net derivative and other contracts3:
Interest rate		420		(114)		46		(24)		16		(46)		298		(127)
Credit		(373)		(25)		6		(5)		41		5		(351)		(33)
Foreign exchange		(43)		(36)		1		—		11		(4)		(71)		(20)
Equity		184		(144)		83		(121)		231		(16)		217		(81)
Commodity and other		1,600		127		6		(28)		(69)		(133)		1,503		34
Total net derivative and other contracts		1,788		(192)		142		(178)		230		(194)		1,596		(227)
Investments		958		8		62		(3)		(66)		2		961		8
Liabilities at fair value
Deposits	$	42	$	(1)	$	—	$	13	$	—	$	—	$	56	$	(1)
Trading liabilities:
Corporate and other debt		36		(1)		(119)		101		—		17		36		(1)
Corporate equities		35		12		(68)		26		—		21		2		—
Securities sold under agreements to repurchase		149		1		—		—		—		—		148		1
Other secured financings		434		(19)		—		13		(220)		(43)		203		(12)
Borrowings		2,014		(59)		—		270		(165)		(86)		2,092		(58)

• Loan originations and consolidations of VIEs are included in Purchases and deconsolidations of VIEs are included in Settlements.
• Amounts related to entering into Net derivative and other contracts, Deposits, Other secured financings and Borrowings primarily represent issuances. Amounts for other line items primarily represent sales.
• Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts.Amounts are presented before counterparty netting.

Valuation Techniques and Sensitivity of Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements

Valuation Techniques and Sensitivity of Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements
	Predominant Valuation Techniques/	Range (Weighted Average or Simple Average/Median)1
$ in millions, except inputs	Significant Unobservable Inputs	At March 31, 2018	At December 31, 2017
Recurring Fair Value Measurement
Assets at fair value
MABS ($342 and $423)
Comparable pricing:	Comparable bond price	0 to 95 points (41 points)	0 to 95 points (26 points)
Loans and lending commitments ($8,128 and $5,945)
Margin loan model:	Discount rate	0% to 3% (1%)	0% to 3% (1%)
	Volatility skew	9% to 67% (28%)	7% to 41% (22%)
Comparable pricing:	Comparable loan price	55 to 101 points (97 points)	55 to 102 points (95 points)
Corporate and other debt ($814 and $701)
Comparable pricing:	Comparable bond price	3 to 100 points (70 points)	3 to 134 points (59 points)
Discounted cash flow:	Recovery rate	16%	6% to 36% (27%)
	Discount rate	7% to 20% (15%)	7% to 20% (14%)
Option model:	At the money volatility	15% to 52% (33%)	17% to 52% (52%)
Corporate equities ($233 and $166)
Comparable pricing:	Comparable equity price	100%	100%
Net derivative and other contracts2:
Interest rate ($670 and $1,218)
Option model:	Interest rate volatility skew	29% to 106% (40% / 43%)	31% to 97% (41% / 47%)
	Inflation volatility	23% to 61% (44% / 41%)	23% to 63% (44% / 41%)
	Interest rate curve	1% to 2% (2% / 2%)	2%
Credit ($(30) and $41)
Comparable pricing:	Cash synthetic basis	10 to 11 points (11 points)	12 to 13 points (12 points)
	Comparable bond price	0 to 75 points (25 points)	0 to 75 points (25 points)
Correlation model:	Credit correlation	39% to 67% (50%)	38% to 100% (48%)
Foreign exchange3 ($(33) and $(112))
Option model:	Interest rate - Foreign exchange correlation	55% to 57% (56% / 56%)	54% to 57% (56% / 56%)
	Interest rate volatility skew	29% to 106% (40% / 43%)	31% to 97% (41% / 47%)
	Contingency probability	90% to 95% (93% / 93%)	95% to 100% (96% / 95%)
Equity3 ($1,015 and $1,208)
Option model:	At the money volatility	14% to 55% (35%)	7% to 54% (32%)
	Volatility skew	-3% to 0% (-1%)	-5% to 0% (-1%)
	Equity - Equity correlation	5% to 99% (76%)	5% to 99% (76%)
	Equity - Foreign exchange correlation	-62% to 55% (-42%)	-55% to 40% (36%)
	Equity - Interest rate correlation	-7% to 48% (18% / 14%)	-7% to 49% (18% / 20%)
Commodity and other ($1,660 and $1,446)
Option model:	Forward power price	$2 to $212 ($30) per MWh	$4 to $102 ($31) per MWh
	Commodity volatility	5% to 167% (14%)	7% to 205% (17%)
	Cross-commodity correlation	5% to 99% (92%)	5% to 99% (92%)
Investments ($1,012 and $1,020)
Discounted cash flow:	WACC	9% to 15% (9%)	8% to 15% (9%)
	Exit multiple	8 to 10 times (10 times)	8 to 11 times (10 times)
Market approach:	EBITDA multiple	6 to 24 times (11 times)	6 to 25 times (11 times)
Comparable pricing:	Comparable equity price	35% to 100% (93%)	45% to 100% (92%)
Liabilities at Fair Value
Securities sold under agreements to repurchase ($ and $150)
Discounted cash flow:	Funding spread	N/A	107 to 126 bps (120 bps)
Other secured financings ($220 and $239)
Discounted cash flow:	Funding spread	54 to 93 bps (74 bps)	39 to 76 bps (57 bps)
Option model:	Volatility skew	-1%	-1%
	At the money volatility	10% to 40% (26%)	10% to 40% (26%)
Borrowings ($3,626 and $2,984)
Option model:	At the money volatility	5% to 33% (23%)	5% to 35% (22%)
	Volatility skew	-2% to 0% (0%)	-2% to 0% (0%)
	Equity - Equity correlation	45% to 95% (81%)	39% to 95% (86%)
	Equity - Foreign exchange correlation	-43% to 30% (-26%)	-55% to 10% (-18%)
Nonrecurring Fair Value Measurement
Assets at fair value
Loans ($1,057 and $924)
Corporate loan model:	Credit spread	94 to 432 bps (206 bps)	93 to 563 bps (239 bps)
Expected recovery:	Asset coverage	95% to 99% (95%)	95% to 99% (95%)

Points—Percentage of par

• Amounts represent weighted averages except where simple averages and the median of the inputs are provided when more relevant.
• CVA and FVA are included in the balance but excluded from the Valuation Technique(s) and Significant Unobservable Inputs. CVA is a Level 3 input when the underlying counterparty credit curve is unobservable. FVA is a Level 3 input in its entirety given the lack of observability of funding spreads in the principal market.
• Includes derivative contracts with multiple risks (i.e., hybrid products).

Measured Based on Net Asset Value

	At March 31, 2018				At December 31, 2017
	Carrying				Carrying
$ in millions	Value		Commitment		Value		Commitment
Private equity	$	1,678	$	304	$	1,674	$	308
Real estate		796		181		800		183
Hedge1		99		4		90		4
Total	$	2,573	$	489	$	2,564	$	495

• Investments in hedge funds may be subject to initial period lock-up or gate provisions, which restrict an investor from withdrawingfrom the fund during a certain initial period or restrict the redemption amount on any redemption date, respectively.

Nonredeemable Funds by Contractual Maturity
	Carrying Value at March 31, 2018
$ in millions	Private Equity		Real Estate
Less than 5 years	$	430	$	60
5-10 years		1,054		527
Over 10 years		194		209
Total	$	1,678	$	796

Earnings Impact of Instruments under the Fair Value Option

Earnings Impact of Instruments under the Fair Value Option
			Interest
	Trading		Income		Net
$ in millions	Revenues		(Expense)		Revenues
Three Months Ended March 31, 2018
Borrowings	$	26	$	(102)	$	(76)

Three Months Ended March 31, 2017
Borrowings	$	(1,625)	$	(119)	$	(1,744)

Gains (Losses) Due to Changes in Instrument-Specific Credit Risk

Gains (Losses) Due to Changes in Instrument-Specific Credit Risk
	Three Months Ended March 31,
		2018				2017
$ in millions		Trading Revenues		OCI		Trading Revenues		OCI
Borrowings	$	(15)	$	593	$	(4)	$	14
Securities sold under
agreements to repurchase		─		2		─		(3)
Loans and other debt1		81		─		(3)		─
Lending commitments2		2		─		─		─

$ in millions	At March 31, 2018		At December 31, 2017
Cumulative pre-tax DVA gain
(loss) recognized in AOCI	$	(1,236)	$	(1,831)

1. Loans and other debt instrument-specific credit gains (losses) were determined by excluding the non-credit components of gains and losses.

2. Gains (losses) on lending commitments were generally determined based on the difference between estimated expected client yields and contractual yields at each respective period-end.

Borrowings Measured at Fair Value on a Recurring Basis

Borrowings Measured at Fair Value on a Recurring Basis
	At		At
	March 31,		December 31,
$ in millions	2018		2017
Business Unit Responsible for Risk Management
Equity	$	25,181	$	25,903
Interest rates		19,744		19,230
Foreign exchange		622		666
Credit		855		815
Commodities		1,131		298
Total	$	47,533	$	46,912

Excess of Contractual Principal Amount Over Fair Value

Excess of Contractual Principal Amount Over Fair Value
	At		At
	March 31,		December 31,
$ in millions	2018		2017
Loans and other debt1	$	14,843	$	13,481
Loans 90 or more days past due
and/or on nonaccrual status1		11,834		11,253
Borrowings2		897		71

1. The majority of the difference between principal and fair value amounts for loans and other debt relates to distressed debt positions purchased at amounts well below par.

2.Borrowings do not include structured notes where the repayment of the initial principal amount fluctuates based on changes in a reference price or index

Fair Value Loans on Nonaccrual Status

Fair Value Loans on Nonaccrual Status
	At		At
	March 31,		December 31,
$ in millions	2018		2017
Nonaccrual loans	$	1,315	$	1,240
Nonaccrual loans 90 or more
days past due	$	654	$	779

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Measured at Fair Value on a Nonrecurring Basis

Carrying and Fair Values

	At March 31, 2018
	Fair Value
$ in millions		Level 2		Level 31		Total
Assets
Loans	$	1,352	$	1,057	$	2,409
Other assets—Premises,
equipment and software		─		─		─
Total	$	1,352	$	1,057	$	2,409
Liabilities
Other liabilities and
accrued expenses—
Lending commitments	$	173	$	40	$	213
Total	$	173	$	40	$	213

	At December 31, 2017
	Fair Value
$ in millions		Level 2		Level 31		Total
Assets
Loans	$	1,394	$	924	$	2,318
Other assets—Other
investments		─		144		144
Total	$	1,394	$	1,068	$	2,462
Liabilities
Other liabilities and
accrued expenses—
Lending commitments	$	158	$	38	$	196
Total	$	158	$	38	$	196

• For significant Level 3 balances, refer to “Significant Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements” section herein for details of the significant unobservable inputs used for nonrecurring fair value measurement.

Gains (Losses) from Fair Value Remeasurements1
	Three Months Ended
	March 31,
$ in millions	2018		2017
Assets
Loans2	$	8	$	32
Other assets—Premises,
equipment and software3		(8)		(5)
Total	$	─	$	27
Liabilities
Other liabilities and
accrued expenses—
Lending commitments2	$	6	$	11
Total	$	6	$	11

• Gains and losses for Loans are classified in Other revenues. For other items, gains and losses are recorded in Other revenues if the item is held for sale, otherwise in Other expenses.
• Nonrecurring changes in the fair value of loans and lending commitments were calculated as follows: for the held for investment category, based on the value of the underlying collateral; and for the held for sale category, based on recently executed transactions, market price quotations, valuation models that incorporate market observable inputs where possible, such as comparable loan or debt prices and CDS spread levels adjusted for any basis difference between cash and derivative instruments, or default recovery analysis where such transactions and quotations are unobservable.
• Losses related to Other assets—Premises, equipment and software costs were determined using techniques that included a default recovery analysis and recently executed transactions.

Financial Instruments Not Measured at Fair Value

Financial Instruments Not Measured at Fair Value

	At March 31, 2018
		Carrying	Fair Value
$ in millions		Value		Level 1		Level 2		Level 3		Total
Financial Assets
Cash and cash equivalents:
Cash and due
from banks	$	29,073	$	29,073	$	—	$	—	$	29,073
Interest bearing
deposits with
banks		22,980		22,980		—		—		22,980
Restricted cash		35,291		35,291		—		—		35,291
Investment securities—
HTM		23,892		11,327		11,270		322		22,919
Securities purchased
under agreements
to resell		80,246		—		80,175		16		80,191
Securities borrowed		135,835		—		135,781		—		135,781
Customer and other
receivables1		61,017		—		57,405		3,433		60,838
Loans2		109,135		—		25,687		83,146		108,833
Other assets		438		—		438		—		438
Financial Liabilities
Deposits	$	160,182	$	—	$	160,172	$	—	$	160,172
Securities sold
under agreements
to repurchase		50,783		—		50,763		1		50,764
Securities loaned		13,556		—		13,623		—		13,623
Other secured
financings		6,852		—		6,265		607		6,872
Customer and
other payables1		191,332		—		191,332		—		191,332
Borrowings		147,431		—		151,664		27		151,691

		At December 31, 2017
		Carrying	Fair Value
$ in millions		Value		Level 1		Level 2		Level 3		Total
Financial Assets
Cash and cash equivalents:
Cash and due
from banks	$	24,816	$	24,816	$	—	$	—	$	24,816
Interest bearing
deposits with
banks		21,348		21,348		—		—		21,348
Restricted cash		34,231		34,231		—		—		34,231
Investment securities—
HTM		23,599		11,119		11,673		289		23,081
Securities purchased
under agreements
to resell		84,258		—		78,239		5,978		84,217
Securities borrowed		124,010		—		124,018		1		124,019
Customer and other
receivables1		51,269		—		47,159		3,984		51,143
Loans2		104,126		—		21,290		82,928		104,218
Other assets		433		—		433		—		433
Financial Liabilities
Deposits	$	159,232	$	—	$	159,232	$	—	$	159,232
Securities sold
under agreements
to repurchase		55,624		—		51,752		3,867		55,619
Securities loaned		13,592		—		13,191		401		13,592
Other secured
financings		7,408		—		5,987		1,431		7,418
Customer and
other payables1		188,464		—		188,464		—		188,464
Borrowings		145,670		—		151,692		30		151,722

• Accrued interestand dividend receivables and payables where carrying value approximates fair value have been excluded.
• Amounts include loans measured at fair value on a nonrecurring basis.

Lending Commitments-Held for Investment and Held for Sale

Commitments—Held for Investment and Held for Sale
	Commitment		Fair Value
$ in millions	Amount1			Level 2		Level 3		Total
March 31, 2018	$	117,582	$	643	$	185	$	828
December 31, 2017		100,151		620		174		794

• For further discussion on lending commitments, see Note 11.

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Derivative Instruments and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Asset Fair Values

Derivative Fair Values
At March 31, 2018
	Assets
$ in millions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	804	$	1	$	—	$	805
Foreign exchange contracts		43		7		—		50
Total		847		8		—		855
Not designated as accounting hedges
Interest rate contracts		175,200		1,742		522		177,464
Credit contracts		5,352		1,981		—		7,333
Foreign exchange contracts		52,711		764		53		53,528
Equity contracts		25,320		—		24,222		49,542
Commodity and other contracts		10,295		—		1,572		11,867
Total		268,878		4,487		26,369		299,734
Total gross derivatives	$	269,725	$	4,495	$	26,369	$	300,589
Amounts offset
Counterparty netting		(198,282)		(3,424)		(22,787)		(224,493)
Cash collateral netting		(42,284)		(664)		—		(42,948)
Total in Trading assets	$	29,159	$	407	$	3,582	$	33,148
Amounts not offset1
Financial instruments collateral		(12,646)		—		—		(12,646)
Other cash collateral		(20)		—		—		(20)
Net amounts	$	16,493	$	407	$	3,582	$	20,482
Net amounts for which master netting or collateral agreements
are not in place or may not be legally enforceable							$	3,876

At December 31, 2017
		Assets
$ in millions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	1,057	$	—	$	—	$	1,057
Foreign exchange contracts		57		6		—		63
Total		1,114		6		—		1,120
Not designated as accounting hedges
Interest rate contracts		177,948		1,700		234		179,882
Credit contracts		5,740		2,282		—		8,022
Foreign exchange contracts		52,878		798		58		53,734
Equity contracts		24,452		—		20,538		44,990
Commodity and other contracts		8,861		—		1,802		10,663
Total		269,879		4,780		22,632		297,291
Total gross derivatives	$	270,993	$	4,786	$	22,632	$	298,411
Amounts offset
Counterparty netting		(201,051)		(3,856)		(19,861)		(224,768)
Cash collateral netting		(42,141)		(689)		—		(42,830)
Total in Trading assets	$	27,801	$	241	$	2,771	$	30,813
Amounts not offset1
Financial instruments collateral		(12,363)		—		—		(12,363)
Other cash collateral		(4)		—		—		(4)
Net amounts	$	15,434	$	241	$	2,771	$	18,446
Net amounts for which master netting or collateral agreements
are not in place or may not be legally enforceable							$	3,154

• Amounts relate to master netting agreements and collateral agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance.

Derivative Liability Fair Values

	Liabilities
$ in millions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	174	$	1	$	—	$	175
Foreign exchange contracts		107		22		—		129
Total		281		23		—		304
Not designated as accounting hedges
Interest rate contracts		159,276		1,267		443		160,986
Credit contracts		5,723		2,125		—		7,848
Foreign exchange contracts		52,493		835		44		53,372
Equity contracts		26,778		—		23,748		50,526
Commodity and other contracts		7,583		—		1,556		9,139
Total		251,853		4,227		25,791		281,871
Total gross derivatives	$	252,134	$	4,250	$	25,791	$	282,175
Amounts offset
Counterparty netting		(198,282)		(3,424)		(22,787)		(224,493)
Cash collateral netting		(31,280)		(416)		—		(31,696)
Total in Trading liabilities	$	22,572	$	410	$	3,004	$	25,986
Amounts not offset1
Financial instruments collateral		(4,966)		—		(374)		(5,340)
Other cash collateral		(38)		(26)		—		(64)
Net amounts	$	17,568	$	384	$	2,630	$	20,582
Net amounts for which master netting or collateral agreements
are not in place or may not be legally enforceable							$	4,366

		Liabilities
$ in millions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	67	$	1	$	—	$	68
Foreign exchange contracts		72		57		—		129
Total		139		58		—		197
Not designated as accounting hedges
Interest rate contracts		161,758		1,178		144		163,080
Credit contracts		6,273		2,272		—		8,545
Foreign exchange contracts		54,191		925		23		55,139
Equity contracts		27,993		—		19,996		47,989
Commodity and other contracts		7,117		—		1,772		8,889
Total		257,332		4,375		21,935		283,642
Total gross derivatives	$	257,471	$	4,433	$	21,935	$	283,839
Amounts offset
Counterparty netting		(201,051)		(3,856)		(19,861)		(224,768)
Cash collateral netting		(31,892)		(484)		—		(32,376)
Total in Trading liabilities	$	24,528	$	93	$	2,074	$	26,695
Amounts not offset1
Financial instruments collateral		(5,523)		—		(412)		(5,935)
Other cash collateral		(18)		(14)		—		(32)
Net amounts	$	18,987	$	79	$	1,662	$	20,728
Net amounts for which master netting or collateral agreements
are not in place or may not be legally enforceable							$	3,751

• Amounts relate to master netting agreements and collateral agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance.

Derivative Notionals

Derivative Notionals
At March 31, 2018
	Assets
$ in billions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	20	$	26	$	—	$	46
Foreign exchange contracts		5		—		—		5
Total		25		26		—		51
Not designated as accounting hedges
Interest rate contracts		4,449		7,472		3,477		15,398
Credit contracts		165		90		—		255
Foreign exchange contracts		2,223		89		8		2,320
Equity contracts		402		—		383		785
Commodity and other contracts		94		—		61		155
Total		7,333		7,651		3,929		18,913
Total gross derivatives	$	7,358	$	7,677	$	3,929	$	18,964

	Liabilities
$ in billions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	2	$	133	$	—	$	135
Foreign exchange contracts		4		2		—		6
Total		6		135		—		141
Not designated as accounting hedges
Interest rate contracts		4,614		7,074		1,181		12,869
Credit contracts		188		83		—		271
Foreign exchange contracts		2,184		98		14		2,296
Equity contracts		425		—		474		899
Commodity and other contracts		74		—		53		127
Total		7,485		7,255		1,722		16,462
Total gross derivatives	$	7,491	$	7,390	$	1,722	$	16,603

At December 31, 2017
	Assets
$ in billions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	20	$	46	$	—	$	66
Foreign exchange contracts		4		—		—		4
Total		24		46		—		70
Not designated as accounting hedges
Interest rate contracts		3,999		6,458		2,714		13,171
Credit contracts		194		100		—		294
Foreign exchange contracts		1,960		67		9		2,036
Equity contracts		397		—		334		731
Commodity and other contracts		86		—		72		158
Total		6,636		6,625		3,129		16,390
Total gross derivatives	$	6,660	$	6,671	$	3,129	$	16,460

	Liabilities
$ in billions		Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate contracts	$	2	$	102	$	—	$	104
Foreign exchange contracts		4		2		—		6
Total		6		104		—		110
Not designated as accounting hedges
Interest rate contracts		4,199		6,325		1,089		11,613
Credit contracts		226		80		—		306
Foreign exchange contracts		2,014		78		51		2,143
Equity contracts		394		—		405		799
Commodity and other contracts		68		—		61		129
Total		6,901		6,483		1,606		14,990
Total gross derivatives	$	6,907	$	6,587	$	1,606	$	15,100

Gains (Losses) on Accounting Hedges

Gains (Losses) on Accounting Hedges
		Three Months Ended
	March 31,
$ in millions		2018		2017
Fair Value Hedges - Recognized in Interest Expense
Interest rate contracts	$	(1,841)	$	(805)
Borrowings		1,852		717
Net Investment Hedges - Foreign exchange contracts
Recognized in OCI	$	(148)	$	(205)
Forward points excluded from hedge
effectiveness testing—Interest income	$	7	$	(9)

Borrowings under Fair Value Hedges

Borrowings under Fair Value Hedges
$ in millions		At March 31, 2018
Carrying amount of Borrowings currently or previously hedged	$	107,264
Basis adjustments included in carrying amount—
outstanding hedges	$	2,035

Trading Revenues by Product Type

Trading Revenues by Product Type

	Three Months Ended
	March 31,
$ in millions		2018		2017
Interest rate contracts	$	871	$	594
Foreign exchange contracts		261		235
Equity security and index contracts1		1,877		1,641
Commodity and other contracts		435		189
Credit contracts		326		576
Total	$	3,770	$	3,235

• Dividend income is included within equity security and index contracts.

Credit Risk-Related Contingencies

Net Derivative Liabilities and Collateral Posted

		At		At
		March 31,		December 31,
$ in millions		2018		2017
Net derivative liabilities with credit
risk-related contingent features	$	17,213	$	20,675
Collateral posted		15,244		16,642

Incremental Collateral or Termination Payments upon Potential Future Ratings Downgrade
		At
		March 31,
$ in millions		2018
One-notch downgrade	$	618
Two-notch downgrade		409
Bilateral downgrade agreements included
in the amounts above1	$	910

1.Amount representsarrangementsbetween the Firm and other parties where upon the downgrade of one party, the downgraded party must deliver collateral to the other party. These bilateral downgrade arrangements are used by the Firm to manage the risk of counterparty downgrades.

Credit Derivatives and Other Credit Contracts

Protection Sold and Purchased with CDS
		At March 31, 2018
	Notional				Fair Value (Asset)/Liability
	Protection		Protection		Protection		Protection
$ in millions	Sold		Purchased		Sold		Purchased
Single name	$	133,209	$	152,446	$	(1,148)	$	1,580
Index and basket		103,531		98,822		(163)		5
Tranched index and basket		12,330		25,506		(276)		517
Total	$	249,070	$	276,774	$	(1,587)	$	2,102
Single name and non-tranched
index and basket
with identical underlying
reference obligations	$	233,572	$	250,376

		At December 31, 2017
		Notional			Fair Value (Asset)/Liability
	Protection		Protection		Protection		Protection
$ in millions	Sold		Purchased		Sold		Purchased
Single name	$	146,948	$	164,773	$	(1,277)	$	1,658
Index and basket		131,073		120,348		(341)		209
Tranched index and basket		11,864		24,498		(342)		616
Total	$	289,885	$	309,619	$	(1,960)	$	2,483
Single name and non-tranched
index and basket
with identical underlying
reference obligations	$	274,473	$	281,162

Credit Ratings of Reference Obligation and Maturities of Credit Protection Sold

	At March 31, 2018
		Maximum Potential Payout/Notional										Fair Value
		Years to Maturity										(Asset)/
$ in millions		Less than 1		1-3		3-5		Over 5		Total		Liability
Single name CDS
Investment grade	$	33,332	$	35,927	$	17,621	$	10,658	$	97,538	$	(1,124)
Non-investment grade		12,994		13,871		6,813		1,993		35,671		(24)
Total single name CDS	$	46,326	$	49,798	$	24,434	$	12,651	$	133,209	$	(1,148)
Index and basket CDS
Investment grade	$	29,448	$	14,049	$	16,003	$	10,902	$	70,402	$	(811)
Non-investment grade		5,941		6,139		17,681		15,698		45,459		372
Total index and basket CDS	$	35,389	$	20,188	$	33,684	$	26,600	$	115,861	$	(439)
Total CDS sold	$	81,715	$	69,986	$	58,118	$	39,251	$	249,070	$	(1,587)
Other credit contracts		—		2		—		127		129		20
Total credit derivatives and other credit contracts	$	81,715	$	69,988	$	58,118	$	39,378	$	249,199	$	(1,567)

	At December 31, 2017
		Maximum Potential Payout/Notional										Fair Value
		Years to Maturity										(Asset)/
$ in millions		Less than 1		1-3		3-5		Over 5		Total		Liability
Single name CDS
Investment grade	$	39,721	$	42,591	$	18,157	$	8,872	$	109,341	$	(1,167)
Non-investment grade		14,213		16,293		6,193		908		37,607		(110)
Total single name CDS	$	53,934	$	58,884	$	24,350	$	9,780	$	146,948	$	(1,277)
Index and basket CDS
Investment grade	$	29,046	$	15,418	$	37,343	$	6,807	$	88,614	$	(1,091)
Non-investment grade		5,246		7,371		32,417		9,289		54,323		408
Total index and basket CDS	$	34,292	$	22,789	$	69,760	$	16,096	$	142,937	$	(683)
Total CDS sold	$	88,226	$	81,673	$	94,110	$	25,876	$	289,885	$	(1,960)
Other credit contracts		2		—		—		134		136		16
Total credit derivatives and other credit contracts	$	88,228	$	81,673	$	94,110	$	26,010	$	290,021	$	(1,944)

XML

Investment Securities (Tables)

3 Months Ended

Mar. 31, 2018

Investment securities

Schedule of AFS and HTM Securities

AFS and HTM Securities
		At March 31, 2018
$ in millions	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
AFS securities
U.S. government and agency
securities:
U.S. Treasury securities	$	30,032	$	—	$	833	$	29,199
U.S. agency securities1		22,084		32		504		21,612
Total U.S. government and
agency securities		52,116		32		1,337		50,811
Corporate and other debt:
Agency CMBS		1,302		2		59		1,245
Non-agency CMBS		857		2		17		842
Corporate bonds		1,346		—		28		1,318
CLO		351		1		—		352
FFELP student loan ABS2		2,173		15		7		2,181
Total corporate and other debt		6,029		20		111		5,938
Total AFS securities		58,145		52		1,448		56,749
HTM securities
U.S. government and agency
securities:
U.S. Treasury securities		11,817		—		490		11,327
U.S. agency securities1		11,747		—		477		11,270
Total U.S. government and
agency securities		23,564		—		967		22,597
Corporate and other debt:
Non-agency CMBS		328		—		6		322
Total HTM securities		23,892		—		973		22,919
Total investment securities	$	82,037	$	52	$	2,421	$	79,668

		At December 31, 2017
$ in millions	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
AFS debt securities
U.S. government and agency
securities:
U.S. Treasury securities	$	26,842	$	—	$	589	$	26,253
U.S. agency securities1		22,803		28		247		22,584
Total U.S. government and
agency securities		49,645		28		836		48,837
Corporate and other debt:
Agency CMBS		1,370		2		49		1,323
Non-agency CMBS		1,102		—		8		1,094
Corporate bonds		1,379		5		12		1,372
CLO		398		1		—		399
FFELP student loan ABS2		2,165		15		7		2,173
Total corporate and other debt		6,414		23		76		6,361
Total AFS debt securities		56,059		51		912		55,198
AFS equity securities		15		—		10		5
Total AFS securities		56,074		51		922		55,203
HTM securities
U.S. government and agency
securities:
U.S. Treasury securities		11,424		—		305		11,119
U.S. agency securities1		11,886		7		220		11,673
Total U.S. government and
agency securities		23,310		7		525		22,792
Corporate and other debt:
Non-agency CMBS		289		1		1		289
Total HTM securities		23,599		8		526		23,081
Total investment securities	$	79,673	$	59	$	1,448	$	78,284

• U.S. agency securities consist mainly of agency-issued debt, agency mortgage pass-through pool securities and CMOs.
• Amounts are backed by a guarantee from the U.S. Department of Education of at least 95% of the principal balance and interest on such loans

Schedule of Investment Securities in an Unrealized Loss Position

Investment Securities in an Unrealized Loss Position
		At March 31, 2018
		Less than 12 Months				12 Months or Longer				Total
$ in millions		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
AFS securities
U.S. government and agency securities:
U.S. Treasury securities	$	25,041	$	711	$	3,958	$	122	$	28,999	$	833
U.S. agency securities		12,634		402		2,417		102		15,051		504
Total U.S. government and agency securities		37,675		1,113		6,375		224		44,050		1,337
Corporate and other debt:
Agency CMBS		910		59		—		—		910		59
Non-agency CMBS		309		7		242		10		551		17
Corporate bonds		809		13		383		15		1,192		28
FFELP student loan ABS		1,006		7		—		—		1,006		7
Total corporate and other debt		3,034		86		625		25		3,659		111
Total AFS securities		40,709		1,199		7,000		249		47,709		1,448
HTM securities
U.S. government and agency securities:
U.S. Treasury securities		6,585		177		4,742		313		11,327		490
U.S. agency securities		4,404		119		6,866		358		11,270		477
Total U.S. government and agency securities		10,989		296		11,608		671		22,597		967
Corporate and other debt:
Non-agency CMBS		220		6		—		—		220		6
Total HTM securities		11,209		302		11,608		671		22,817		973
Total investment securities	$	51,918	$	1,501	$	18,608	$	920	$	70,526	$	2,421

		At December 31, 2017
		Less than 12 Months				12 Months or Longer				Total
$ in millions		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
AFS debt securities
U.S. government and agency securities:
U.S. Treasury securities	$	21,941	$	495	$	4,287	$	94	$	26,228	$	589
U.S. agency securities		12,673		192		2,513		55		15,186		247
Total U.S. government and agency securities		34,614		687		6,800		149		41,414		836
Corporate and other debt:
Agency CMBS		930		49		—		—		930		49
Non-agency CMBS		257		1		559		7		816		8
Corporate bonds		316		3		389		9		705		12
FFELP student loan ABS		984		7		—		—		984		7
Total corporate and other debt		2,487		60		948		16		3,435		76
Total AFS debt securities		37,101		747		7,748		165		44,849		912
AFS equity securities		—		—		5		10		5		10
Total AFS securities		37,101		747		7,753		175		44,854		922
HTM securities
U.S. government and agency securities:
U.S. Treasury securities		6,608		86		4,512		219		11,120		305
U.S. agency securities		2,879		24		7,298		196		10,177		220
Total U.S. government and agency securities		9,487		110		11,810		415		21,297		525
Corporate and other debt:
Non-agency CMBS		124		1		—		—		124		1
Total HTM securities		9,611		111		11,810		415		21,421		526
Total investment securities	$	46,712	$	858	$	19,563	$	590	$	66,275	$	1,448

Schedule of Investment Securities by Contractual Maturity

Investment Securities by Contractual Maturity
		At March 31, 2018
$ in millions		Amortized Cost		Fair Value	Annualized Average Yield
AFS securities
U.S. government and agency securities:
U.S. Treasury securities:
Due within 1 year	$	6,153	$	6,132	0.9%
After 1 year through 5 years		19,385		18,906	1.6%
After 5 years through 10 years		4,494		4,161	1.4%
Total		30,032		29,199
U.S. agency securities:
Due within 1 year		43		42	1.1%
After 1 year through 5 years		1,899		1,883	1.0%
After 5 years through 10 years		1,555		1,506	1.8%
After 10 years		18,587		18,181	2.0%
Total		22,084		21,612
Total U.S. government and agency
securities		52,116		50,811	1.6%
Corporate and other debt:
Agency CMBS:
Due within 1 year		19		19	1.3%
After 1 year through 5 years		431		430	1.3%
After 5 years through 10 years		47		47	1.2%
After 10 years		805		749	1.6%
Total		1,302		1,245
Non-agency CMBS:
After 5 years through 10 years		36		35	2.5%
After 10 years		821		807	1.9%
Total		857		842
Corporate bonds:
Due within 1 year		97		97	1.6%
After 1 year through 5 years		1,175		1,150	2.4%
After 5 years through 10 years		74		71	2.5%
Total		1,346		1,318
CLO:
After 5 years through 10 years		153		153	1.5%
After 10 years		198		199	2.4%
Total		351		352
FFELP student loan ABS:
After 1 year through 5 years		48		47	0.8%
After 5 years through 10 years		390		388	0.8%
After 10 years		1,735		1,746	1.1%
Total		2,173		2,181
Total corporate and other debt		6,029		5,938	1.6%
Total AFS securities		58,145		56,749	1.6%
HTM securities
U.S. government securities:
U.S. Treasury securities:
Due within 1 year		2,027		2,012	1.2%
After 1 year through 5 years		3,952		3,871	1.8%
After 5 years through 10 years		5,112		4,807	1.9%
After 10 years		726		637	2.3%
Total		11,817		11,327
U.S. agency securities:
After 5 years through 10 years		34		33	1.9%
After 10 years		11,713		11,237	2.6%
Total		11,747		11,270
Total U.S. government and agency
securities		23,564		22,597	2.2%
Corporate and other debt:
Non-agency CMBS:
After 1 year through 5 years		92		92	3.6%
After 5 years through 10 years		217		212	3.9%
After 10 years		19		18	4.1%
Total corporate and other debt		328		322	3.8%
Total HTM securities		23,892		22,919	2.2%
Total investment securities	$	82,037	$	79,668	1.8%

XML

Collateralized Transactions (Tables)

3 Months Ended

Mar. 31, 2018

Collateralized Transactions

Offsetting of Certain Collaterized Transactions

Offsetting of Certain Collateralized Transactions
		At March 31, 2018
$ in millions		Gross Amounts		Amounts Offset		Net Amounts Presented		Amounts Not Offset1		Net Amounts
Assets
Securities purchased
under agreements
to resell	$	185,498	$	(105,252)	$	80,246	$	(74,843)	$	5,403
Securities borrowed		149,347		(13,512)		135,835		(132,271)		3,564
Liabilities
Securities sold
under agreements
to repurchase	$	156,827	$	(105,252)	$	51,575	$	(45,207)	$	6,368
Securities loaned		27,068		(13,512)		13,556		(13,336)		220
Net amounts for which master netting agreements are not in place or may not
be legally enforceable
Securities purchased under agreements to resell									$	5,212
Securities borrowed										669
Securities sold under agreements to repurchase										5,118
Securities loaned										194

		At December 31, 2017
$ in millions		Gross Amounts		Amounts Offset		Net Amounts Presented		Amounts Not Offset1		Net Amounts
Assets
Securities purchased
under agreements
to resell	$	199,044	$	(114,786)	$	84,258	$	(78,009)	$	6,249
Securities borrowed		133,431		(9,421)		124,010		(119,358)		4,652
Liabilities
Securities sold
under agreements
to repurchase	$	171,210	$	(114,786)	$	56,424	$	(48,067)	$	8,357
Securities loaned		23,014		(9,422)		13,592		(13,271)		321
Net amounts for which master netting agreements are not in place or may not
be legally enforceable
Securities purchased under agreements to resell									$	5,687
Securities borrowed										572
Securities sold under agreements to repurchase										6,945
Securities loaned										307

1.Amountsrelate to master netting agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance.

Gross Secured Financing Balances

Maturities and Collateral Pledged
Gross Secured Financing Balances by Remaining Contractual Maturity
		At March 31, 2018
$ in millions		Overnight and Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
Securities sold under
agreements to
repurchase	$	39,192	$	49,822	$	27,926	$	39,887	$	156,827
Securities loaned		16,869		603		2,045		7,551		27,068
Total included in the
offsetting disclosure	$	56,061	$	50,425	$	29,971	$	47,438	$	183,895
Trading liabilities―
Obligation to return
securities received
as collateral		18,136		—		610		—		18,746
Total	$	74,197	$	50,425	$	30,581	$	47,438	$	202,641

		At December 31, 2017
$ in millions		Overnight and Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
Securities sold under
agreements to
repurchase	$	41,332	$	66,593	$	28,682	$	34,603	$	171,210
Securities loaned		12,130		873		1,577		8,434		23,014
Total included in the
offsetting disclosure	$	53,462	$	67,466	$	30,259	$	43,037	$	194,224
Trading liabilities―
Obligation to return
securities received
as collateral		22,555		—		—		—		22,555
Total	$	76,017	$	67,466	$	30,259	$	43,037	$	216,779

Gross Secured Financing Balances by Class of Collateral Pledged
$ in millions		At March 31, 2018		At December 31, 2017
Securities sold under agreements to repurchase
U.S. government and agency securities	$	37,361	$	43,346
State and municipal securities		1,643		2,451
Other sovereign government obligations		78,844		87,141
ABS		2,204		1,130
Corporate and other debt		10,063		7,737
Corporate equities		25,893		28,497
Other		819		908
Total	$	156,827	$	171,210
Securities loaned
U.S. government and agency securities	$	6	$	81
Other sovereign government obligations		14,077		9,489
Corporate and other debt		28		14
Corporate equities		12,770		13,174
Other		187		256
Total	$	27,068	$	23,014
Total included in the offsetting disclosure	$	183,895	$	194,224
Trading liabilities―Obligation to return securities received as collateral
Corporate equities	$	18,746	$	22,555
Total	$	202,641	$	216,779

Carrying Value of Assets Loaned or Pledged Without Counterparty Right to Sell or Repledge

Carrying Value of Assets Loaned or Pledged without
Counterparty Right to Sell or Repledge
$ in millions		At March 31, 2018		At December 31, 2017
Trading assets	$	34,590	$	31,324
Loans (gross of allowance for loan losses)		342		228
Total	$	34,932	$	31,552

Fair Value of Collateral Received with Right to Sell or Repledge

Fair Value of Collateral Received with Right to Sell or Repledge
$ in millions		At March 31, 2018		At December 31, 2017
Collateral received with right to sell or repledge	$	597,886	$	599,244
Collateral that was sold or repledged		471,985		475,113

Customer Margin Lending and Other

Customer Margin Lending and Other

$ in millions		At March 31, 2018		At December 31, 2017
Net customer receivables representing
margin loans	$	34,382	$	32,112

Restricted Cash and Segregated Securities

Restricted Cash and Segregated Securities
$ in millions		At March 31, 2018		At December 31, 2017
Restricted cash	$	35,291	$	34,231
Segregated securities1		18,917		20,549
Total	$	54,208	$	54,780

• Securities segregated under federal regulations for the Firm’s U.S. broker-dealers are sourced from Securities purchased under agreements to resell and Trading assets in the balance sheets.

XML

Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2018

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Loans Held for Investment and Held for Sale

Loans by Type
		At March 31, 2018
	Loans Held		Loans Held
$ in millions	for Investment		for Sale		Total Loans
Corporate loans	$	31,903	$	12,000	$	43,903
Consumer loans		26,877		—		26,877
Residential real estate loans		26,566		33		26,599
Wholesale real estate loans		10,021		1,978		11,999
Total loans, gross		95,367		14,011		109,378
Allowance for loan losses		(243)		—		(243)
Total loans, net	$	95,124	$	14,011	$	109,135
		At December 31, 2017
	Loans Held		Loans Held
$ in millions	for Investment		for Sale		Total Loans
Corporate loans	$	29,754	$	9,456	$	39,210
Consumer loans		26,808		—		26,808
Residential real estate loans		26,635		35		26,670
Wholesale real estate loans		9,980		1,682		11,662
Total loans, gross		93,177		11,173		104,350
Allowance for loan losses		(224)		—		(224)
Total loans, net	$	92,953	$	11,173	$	104,126

Loans by Interest Rate Type
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Fixed	$	14,252	$	13,339
Floating or adjustable		94,883		90,787
Total loans, net	$	109,135	$	104,126

Loans to Non-U.S. Borrowers
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Loans, net	$	16,110	$	9,977

Loans Held for Investment Before Allowance by Credit Quality

Loans Held for Investment before Allowance by Credit Quality
		At March 31, 2018
$ in millions	Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
Pass	$	31,327	$	26,872	$	26,492	$	9,126	$	93,817
Special mention		162		5		—		460		627
Substandard		405		—		74		435		914
Doubtful		9		—		—		—		9
Loss		—		—		—		—		—
Total	$	31,903	$	26,877	$	26,566	$	10,021	$	95,367

		At December 31, 2017
$ in millions	Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
Pass	$	29,166	$	26,802	$	26,562	$	9,480	$	92,010
Special mention		188		6		—		200		394
Substandard		393		—		73		300		766
Doubtful		7		—		—		—		7
Loss		—		—		—		—		—
Total	$	29,754	$	26,808	$	26,635	$	9,980	$	93,177

Impaired Loans and Lending Commitments Before Allowance

Impaired Loans and Lending Commitments before Allowance
		At March 31, 2018
			Residential
$ in millions	Corporate		Real Estate		Total
Loans
With allowance	$	15	$	—	$	15
Without allowance1		69		49		118
UPB		95		51		146
Lending Commitments
Without allowance1	$	226	$	—	$	226
		At December 31, 2017
			Residential
$ in millions	Corporate		Real Estate		Total
Loans
With allowance	$	16	$	—	$	16
Without allowance1		118		45		163
UPB		146		46		192
Lending Commitments
Without allowance1	$	199	$	—	$	199

• At March 31,2018 and December 31, 2017, no allowance was recorded for these loans and lending commitments as the present value of the expected future cash flows (or, alternatively, the observable market price of the instrument or the fair value of the collateral held) equaled or exceeded the carrying value.

Impaired Loans and Allowance by Region

Impaired Loans and Allowance by Region
		At March 31, 2018
$ in millions	Americas		EMEA		Asia		Total
Impaired loans	$	129	$	—	$	4	$	133
Allowance for loan losses		199	$	42	$	2	$	243
		At December 31, 2017
$ in millions	Americas		EMEA		Asia		Total
Impaired loans	$	160	$	9	$	10	$	179
Allowance for loan losses		194		27		3		224

Troubled Debt Restructurings

Troubled Debt Restructurings
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Loans	$	52	$	51
Lending commitments		25		28
Allowance for loan losses and lending
commitments		6		10

Allowance for Loan Losses and Lending Commitments Rollforward

Allowance for Loan Losses Rollforward
$ in millions		Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
December 31, 2017	$	126	$	4	$	24	$	70	$	224
Provision (release)		6		—		(1)		14		19
Other		(1)		—		—		1		—
March 31, 2018	$	131	$	4	$	23	$	85	$	243
Inherent	$	126	$	4	$	23	$	85	$	238
Specific		5		—		—		—		5

$ in millions		Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
December 31, 2016	$	195	$	4	$	20	$	55	$	274
Recoveries		1		—		—		—		1
Provision (release)		13		—		—		9		22
March 31, 2017	$	209	$	4	$	20	$	64	$	297
Inherent	$	142	$	4	$	20	$	64	$	230
Specific		67		—		—		—		67

Allowance for Lending Commitments Rollforward
$ in millions		Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
December 31, 2017	$	194	$	1	$	—	$	3	$	198
Provision (release)		7		—		—		—		7
Other		—		—		—		—		—
March 31, 2018	$	201	$	1	$	—	$	3	$	205
Inherent	$	200	$	1	$	—	$	3	$	204
Specific		1		—		—		—		1

$ in millions		Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
December 31, 2016	$	185	$	1	$	—	$	4	$	190
Provision (release)		3		—		—		—		3
March 31, 2017	$	188	$	1	$	—	$	4	$	193
Inherent	$	186	$	1	$	—	$	4	$	191
Specific		2		—		—		—		2

Employee Loans

Employee Loans
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Balance	$	3,687	$	4,185
Allowance for loan losses		(75)		(77)
Balance, net	$	3,612	$	4,108
Repayment term range, in years		1 to 20		1 to 20

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Equity Method Investments (Tables)

3 Months Ended

Mar. 31, 2018

Equity Method Investments

Schedule of Equity Method Investments

Equity Method Investment Balances
$ in millions	At March 31, 2018		At December 31, 2017
Investments	$	2,662	$	2,623

	Three Months Ended March 31,
$ in millions	2018		2017
Income (loss)	$	50	$	9

MUMSS

Equity Method Investments

Schedule of Equity Method Investments

	Three Months Ended March 31,
$ in millions	2018		2017
Income from investment in MUMSS	$	56	$	48

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Deposits (Tables)

3 Months Ended

Mar. 31, 2018

Deposits [Abstract]

Deposits

Deposits
		At March 31,		At December 31,
$ in millions		2018		2017
Savings and demand deposits	$	138,358	$	144,487
Time deposits		22,066		14,949
Total	$	160,424	$	159,436
Deposits subject to FDIC insurance	$	129,968	$	127,017
Time deposits that equal or
exceed the FDIC insurance limit	$	10	$	38

Time Deposit Maturities

Time Deposit Maturities
$ in millions		At March 31, 2018
2018	$	13,164
2019		4,803
2020		2,257
2021		747
2022		418
Thereafter		677

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Borrowings and Other Secured Financings (Tables)

3 Months Ended

Mar. 31, 2018

Borrowings and Other Secured Financings

Borrowings

Borrowings
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Original maturities of one year or less	$	1,256	$	1,519
Original maturities greater than one year
Senior	$	183,712	$	180,835
Subordinated		9,996		10,228
Total	$	193,708	$	191,063
Total borrowings	$	194,964	$	192,582
Weighted average stated maturity, in years1		6.6		6.6

• Includes only borrowings with original maturities greater than one year.

Other Secured Financings

Other Secured Financings by Original Maturity and Type
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Original maturities:
Greater than one year	$	8,159	$	8,685
One year or less		1,406		2,034
Failed sales1		710		552
Total	$	10,275	$	11,271

• For more information on failed sales, see Note 12.

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Commitments, Guarantees and Contingencies (Tables)

3 Months Ended

Mar. 31, 2018

Commitments, Guarantees and Contingencies [Abstract]

Commitments by Years to Maturity

		Years to Maturity at March 31, 2018
		Less
$ in millions		than 1		1-3		3-5		Over 5		Total
Lending:
Corporate	$	14,447	$	43,086	$	46,618	$	7,454	$	111,605
Consumer		6,598		—		8		3		6,609
Residential real
estate		5		64		33		259		361
Wholesale real
estate		183		833		25		—		1,041
Forward-starting
secured financing
receivables		85,399		—		—		1,177		86,576
Underwriting		344		—		—		—		344
Investment activities		527		96		62		230		915
Letters of credit and
other financial
guarantees		195		—		1		41		237
Total	$	107,698	$	44,079	$	46,747	$	9,164	$	207,688
Corporate lending commitments participated to third parties									$	6,877
Forward-starting secured financing receivables
settled within three business days									$	72,754

Obligations under Guarantee Arrangements

Obligations under Guarantee Arrangements at March 31, 2018
		Maximum Potential Payout/Notional
		Years to Maturity
$ in millions		Less than 1		1-3		3-5		Over 5		Total
Credit
derivatives	$	81,715	$	69,986	$	58,118	$	39,251	$	249,070
Other credit
contracts		—		2		—		127		129
Non-credit
derivatives		1,903,988		1,196,331		379,171		639,749		4,119,239
Standby letters of
credit and other
financial guarantees
issued1		806		1,114		1,272		4,903		8,095
Market value
guarantees		40		62		58		—		160
Liquidity
facilities		3,367		—		—		—		3,367
Whole loan sales
guarantees		—		1		1		23,223		23,225
Securitization
representations
and warranties		—		—		—		60,861		60,861
General partner
guarantees		33		52		324		27		436
								Carrying
								Amount
								(Asset)/		Collateral/
$ in millions								Liability		Recourse
Credit derivatives2							$	(1,587)	$	—
Other credit contracts								20		—
Non-credit derivatives2								45,314		—
Standby letters of credit and other
financial guarantees issued1								(182)		6,588
Market value guarantees								—		—
Liquidity facilities								(5)		5,475
Whole loan sales guarantees								8		—
Securitization representations and warranties								91		—
General partner guarantees								59		—

1. These amounts include certain issued standby letters of credit participated to third parties, totaling $0.7 billion of notional and collateral/recourse, due to the nature of the Firm’s obligations under these arrangements.

2. Carrying amounts of derivative contracts are shown on a gross basis prior to cash collateral or counterparty netting. For further information on derivative contracts, see Note 4.

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Variable Interest Entities and Securitization Activities (Tables)

3 Months Ended

Mar. 31, 2018

Securitization Activities and Variable Interest Entities [Abstract]

Consolidated VIEs

Assets and Liabilities by Type of Activity
		At March 31, 2018				At December 31, 2017
$ in millions	VIE Assets		VIE Liabilities		VIE Assets		VIE Liabilities
OSF	$	361	$	1	$	378	$	3
MABS1		234		197		249		210
Other2		2,718		1,131		1,174		250
Total	$	3,313	$	1,329	$	1,801	$	463

OSF—Other structured financings

• Amounts include transactions backed by residential mortgage loans, commercial mortgage loans and other types of assets, including consumer or commercial assets. The value of assets is determined based on the fair value of the liabilities and the interests owned by the Firm in such VIEsas the fair values for the liabilities and interests owned are more observable.
• Other primarily includes investment funds, certain operating entities, CLOs and structured transactions.At March 31, 2018, Other includes the consolidation of a fund managed by Mesa West Capital, LLC, which was acquired in the current quarter.

Assets and Liabilities by Balance Sheet Caption
	At March 31,		At December 31,
$ in millions	2018		2017
Assets
Cash and cash equivalents:
Cash and due from banks	$	103	$	69
Restricted cash		223		222
Trading assets at fair value		2,345		833
Customer and other receivables		21		19
Goodwill		18		18
Intangible assets		149		155
Other assets		454		485
Total	$	3,313	$	1,801
Liabilities
Other secured financings	$	1,305	$	438
Other liabilities and accrued
expenses		24		25
Total	$	1,329	$	463

Select Information Related to Consolidated VIEs
	At March 31,		At December 31,
$ in millions	2018		2017
Noncontrolling interests	$	494	$	189

Non-Consolidated VIEs

Non-consolidated VIEs
	At March 31, 2018
$ in millions	MABS		CDO		MTOB		OSF		Other
VIE assets (unpaid
principal balance)	$	76,854	$	14,445	$	5,439	$	3,307	$	19,959
Maximum exposure to loss
Debt and equity
interests	$	9,075	$	2,163	$	81	$	1,589	$	4,654
Derivative and
other contracts		—		—		3,367		—		2,317
Commitments,
guarantees
and other		882		902		—		161		327
Total	$	9,957	$	3,065	$	3,448	$	1,750	$	7,298
Carrying value of exposure to loss—Assets
Debt and equity
interests	$	9,075	$	2,163	$	51	$	1,185	$	4,654
Derivative and
other contracts		—		—		5		—		111
Total	$	9,075	$	2,163	$	56	$	1,185	$	4,765

	At December 31, 2017
$ in millions		MABS		CDO		MTOB		OSF		Other
VIE assets (unpaid
principal balance)	$	89,288	$	9,807	$	5,306	$	3,322	$	31,934
Maximum exposure to loss
Debt and equity
interests	$	10,657	$	1,384	$	80	$	1,628	$	4,730
Derivative and
other contracts		—		—		3,333		—		1,686
Commitments,
guarantees
and other		1,214		668		—		164		433
Total	$	11,871	$	2,052	$	3,413	$	1,792	$	6,849
Carrying value of exposure to loss—Assets
Debt and equity
interests	$	10,657	$	1,384	$	43	$	1,202	$	4,730
Derivative and
other contracts		—		—		5		—		184
Total	$	10,657	$	1,384	$	48	$	1,202	$	4,914

MTOB—Municipaltender option bonds

Non-consolidated VIEs Mortgage- and Asset-Backed Securitization Assets
		At March 31, 2018				At December 31, 2017
	UPB		Debt and Equity Interests		UPB		Debt and Equity Interests
$ in millions
Residential mortgages	$	13,564	$	782	$	15,636	$	1,272
Commercial mortgages		35,886		1,934		46,464		2,331
U.S. agency collateralized
mortgage obligations		14,405		3,150		16,223		3,439
Other consumer or
commercial loans		12,999		3,209		10,965		3,615
Total	$	76,854	$	9,075	$	89,288	$	10,657

Additional VIE Assets Owned
	At March 31,		At December 31,
$ in millions	2018		2017
VIE assets	$	12,314	$	11,318

Transfers of Assets with Continuing Involvement

Transfers of Assets with Continuing Involvement
		At March 31, 2018
	RML		CML		U.S. Agency CMO		CLN and Other1
$ in millions
SPE assets (UPB)2	$	14,978	$	59,607	$	14,751	$	16,823
Retained interests
Investment grade	$	—	$	324	$	825	$	5
Non-investment grade
(fair value)		1		107		—		308
Total	$	1	$	431	$	825	$	313
Interests purchased in the secondary market (fair value)
Investment grade	$	—	$	112	$	71	$	—
Non-investment grade		16		57		—		15
Total	$	16	$	169	$	71	$	15
Derivative assets (fair value)	$	—	$	—	$	—	$	191
Derivative liabilities (fair value)		—		—		—		119

		At December 31, 2017
	RML		CML		U.S. Agency CMO		CLN and Other1
$ in millions
SPE assets(UPB)2	$	15,555	$	62,744	$	11,612	$	17,060
Retained interests
Investment grade	$	—	$	293	$	407	$	4
Non-investment grade
(fair value)		1		98		—		478
Total	$	1	$	391	$	407	$	482
Interests purchased in the secondary market (fair value)
Investment grade	$	—	$	94	$	439	$	—
Non-investment grade		16		66		—		4
Total	$	16	$	160	$	439	$	4
Derivative assets (fair value)	$	1	$	—	$	—	$	226
Derivative liabilities (fair value)		—		—		—		85

RML—Residential mortgage loans

CML—Commercial mortgage loans

• Amounts include CLO transactions managed by unrelated third parties.
• Amounts include assets transferred by unrelated transferors.

	Fair Value at March 31, 2018
$ in millions	Level 2		Level 3		Total
Retained interests
Investment grade	$	831	$	5	$	836
Non-investment grade		13		403		416
Total	$	844	$	408	$	1,252
Interests purchased in the secondary market
Investment grade	$	182	$	1	$	183
Non-investment grade		52		36		88
Total	$	234	$	37	$	271
Derivative assets	$	50	$	141	$	191
Derivative liabilities		114		5		119

	Fair Value at December 31, 2017
$ in millions	Level 2		Level 3		Total
Retained interests
Investment grade	$	407	$	4	$	411
Non-investment grade		22		555		577
Total	$	429	$	559	$	988
Interests purchased in the secondary market
Investment grade	$	531	$	2	$	533
Non-investment grade		57		29		86
Total	$	588	$	31	$	619
Derivative assets	$	78	$	149	$	227
Derivative liabilities		81		4		85

Proceeds from New Securitization Transactions and Sales of Loans

Proceeds from New Securitization Transactions and Sales of Loans
	Three Months Ended
	March 31,
$ in millions		2018		2017
New transactions1	$	6,134	$	5,997
Retained interests		481		430
Sales of corporate loans to
CLO SPEs1, 2		94		179

• Net gains on new transactions and sales of corporate loans to CLO entities at the time of the sale were not material for all periods presented.
• Sponsored by non-affiliates.

Assets Sold with Retained Exposure

Assets Sold with Retained Exposure
	At March 31,		At December 31,
$ in millions	2018		2017
Carrying value of assets
derecognized at the time of
sale and gross cash proceeds	$	26,800	$	19,115
Fair value
Assets sold	$	26,566	$	19,138
Derivative assets recognized
in the balance sheets		2		176
Derivative liabilities recognized
in the balance sheets		236		153

Carrying Value of Assets and Liabilities Related to Failed Sales

Carrying Value of Assets and Liabilities Related to Failed Sales
		At March 31, 2018				At December 31, 2017
$ in millions	Assets		Liabilities		Assets		Liabilities
Failed sales	$	710	$	710	$	552	$	552

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Regulatory Requirements (Tables)

3 Months Ended

Mar. 31, 2018

Regulatory Requirements

Schedule of Regulatory Capital and Capital Ratios

Regulatory Capital
		At March 31, 2018
$ in millions		Amount	Ratio	Required Ratio1
Common Equity Tier 1 capital	$	60,568	15.5%	8.6%
Tier 1 capital		69,213	17.7%	10.1%
Total capital		79,363	20.3%	12.1%
Total RWA		390,390	N/A	N/A
Tier 1 leverage		69,213	8.2%	4.0%
Adjusted average assets2		846,868	N/A	N/A
SLR3		69,213	6.3%	5.0%
Supplementary leverage exposure		1,091,518	N/A	N/A
		At December 31, 2017
$ in millions		Amount	Ratio	Required Ratio1
Common Equity Tier 1 capital	$	61,134	16.5%	7.3%
Tier 1 capital		69,938	18.9%	8.8%
Total capital		80,275	21.7%	10.8%
Total RWA		369,578	N/A	N/A
Tier 1 leverage		69,938	8.3%	4.0%
Adjusted average assets2		842,270	N/A	N/A

• Percentages represent minimum required regulatory capital ratios under the transitional rules. Regulatory compliance was determined based on capital ratios calculated under the transitional rules until December 31, 2017.
• Adjusted average assets represent the denominator of the Tier 1 leverage ratio and are composed of the average daily balance of consolidated on-balance sheet assets under U.S. GAAP during the current quarter and the quarter ended December 31, 2017, respectively, adjusted for disallowed goodwill, intangible assets, certain deferred tax assets, certain investments in the capital instruments of unconsolidated financial institutions and other adjustments
• The SLR became effective as a capital standard on January 1, 2018.

MSBNA

Regulatory Requirements

Schedule of Regulatory Capital and Capital Ratios

MSBNA’s Regulatory Capital
		At March 31, 2018
$ in millions		Amount	Ratio	Required Ratio1
Common Equity Tier 1 capital	$	15,514	19.7%	6.5%
Tier 1 capital		15,514	19.7%	8.0%
Total capital		15,785	20.1%	10.0%
Tier 1 leverage		15,514	11.8%	5.0%
SLR2			9.0%	6.0%
		At December 31, 2017
$ in millions		Amount	Ratio	Required Ratio1
Common Equity Tier 1 capital	$	15,196	20.5%	6.5%
Tier 1 capital		15,196	20.5%	8.0%
Total capital		15,454	20.8%	10.0%
Tier 1 leverage		15,196	11.8%	5.0%

MSPBNA

Regulatory Requirements

Schedule of Regulatory Capital and Capital Ratios

MSPBNA’s Regulatory Capital
		At March 31, 2018
$ in millions		Amount	Ratio	Required Ratio1
Common Equity Tier 1 capital	$	6,382	24.2%	6.5%
Tier 1 capital		6,382	24.2%	8.0%
Total capital		6,425	24.4%	10.0%
Tier 1 leverage		6,382	9.7%	5.0%
SLR2			9.3%	6.0%
		At December 31, 2017
$ in millions		Amount	Ratio	Required Ratio1
Common Equity Tier 1 capital	$	6,215	24.4%	6.5%
Tier 1 capital		6,215	24.4%	8.0%
Total capital		6,258	24.6%	10.0%
Tier 1 leverage		6,215	9.7%	5.0%

• Ratios that are required in order to be considered well-capitalized for U.S. regulatory purposes. Regulatory compliance was determined based on capital ratios calculated under the transitional rules until December 31, 2017.
• The SLR became effective as a capital standard on January 1, 2018.

MS&Co.

Regulatory Requirements

Schedule of Broker-Dealer Regulatory Capital Requirements

U.S. Broker-Dealer Regulatory Capital Requirements
MS&Co. Regulatory Capital
$ in millions		At March 31, 2018		At December 31, 2017
Net capital	$	12,661	$	10,142
Excess net capital		10,303		8,018

MSSB LLC

Regulatory Requirements

Schedule of Broker-Dealer Regulatory Capital Requirements

MSSB LLC Regulatory Capital
$ in millions		At March 31, 2018		At December 31, 2017
Net capital	$	2,919	$	2,567
Excess net capital		2,759		2,400

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Total Equity (Tables)

3 Months Ended

Mar. 31, 2018

Total Equity

Repurchases of Common Stock

Share Repurchases
		Three Months Ended
		March 31,
$ in millions		2018		2017
Repurchases of common stock
under the Firm's share
repurchase program	$	1,250	$	750

Preferred Stock

Preferred Stock
	Three Months Ended
	March 31,
$ in millions	2018		2017
Dividends declared	$	93	$	90

Preferred Stock Outstanding
$ in millions, except per share data	Shares Outstanding			Carrying Value
	At	Liquidation		At		At
	March 31,	Preference		March 31,		December 31,
	2018	per Share		2018		2017
Series
A	44,000	$	25,000	$	1,100	$	1,100
C1	519,882		1,000		408		408
E	34,500		25,000		862		862
F	34,000		25,000		850		850
G	20,000		25,000		500		500
H	52,000		25,000		1,300		1,300
I	40,000		25,000		1,000		1,000
J	60,000		25,000		1,500		1,500
K	40,000		25,000		1,000		1,000
Total				$	8,520	$	8,520

1. Series C is composed of the issuance of 1,160,791 shares of Series C Preferred Stock to MUFG for an aggregate purchase price of $911 million, less the redemption of 640,909 shares of Series C Preferred Stock of $503 million, which were converted to common shares of approximately $705 million.

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)1
$ in millions	Foreign Currency Translation Adjustments		AFS Securities		Pension, Postretirement and Other		DVA		Total
December 31, 2017	$	(767)	$	(547)	$	(591)	$	(1,155)	$	(3,060)
Cumulative adjustment for
for accounting
changes2		(8)		(111)		(124)		(194)		(437)
OCI during the period		60		(410)		5		436		91
March 31, 2018	$	(715)	$	(1,068)	$	(710)	$	(913)	$	(3,406)

December 31, 2016	$	(986)	$	(588)	$	(474)	$	(595)	$	(2,643)
OCI during the period		107		84		—		2		193
March 31, 2017	$	(879)	$	(504)	$	(474)	$	(593)	$	(2,450)

• Amounts net of tax and noncontrolling interests.
• The cumulative adjustment for accounting changes is primarily the effect of the adoption of the accounting update Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This adjustment was recorded as of January 1, 2018 to reclassify certain income tax effects related to enactment of the Tax Act from AOCI to Retained earnings, primarily related to the remeasurement of deferred tax assets and liabilities resulting from the reduction in corporate income tax rate to 21%. See Note 2 for further information.

Period Changes in OCI Components

Components of Period Changes in OCI
	Three Months Ended
	March 31, 20181
$ in millions		Pre-tax Gain (Loss)		Income Tax Benefit (Provision)		After-tax Gain (Loss)		Non-controlling Interests		Net
Foreign currency translation adjustments
OCI activity	$	78	$	39	$	117	$	57	$	60
Reclassified to earnings		—		—		—		—		—
Net OCI	$	78	$	39	$	117	$	57	$	60
Change in net unrealized gains (losses) on AFS securities
OCI activity	$	(535)	$	125	$	(410)	$	—	$	(410)
Reclassified to earnings		—		—		—		—		—
Net OCI	$	(535)	$	125	$	(410)	$	—	$	(410)
Pension, postretirement and other
OCI activity	$	—	$	—	$	—	$	—	$	—
Reclassified to earnings		6		(1)		5		—		5
Net OCI	$	6	$	(1)	$	5	$	—	$	5
Change in net DVA
OCI activity	$	580	$	(140)	$	440	$	15	$	425
Reclassified to earnings		15		(4)		11		—		11
Net OCI	$	595	$	(144)	$	451	$	15	$	436

	Three Months Ended
	March 31, 2017
$ in millions		Pre-tax Gain (Loss)		Income Tax Benefit (Provision)		After-tax Gain (Loss)		Non-controlling Interests		Net
Foreign currency translation adjustments
OCI activity	$	43	$	107	$	150	$	43	$	107
Reclassified to earnings		—		—		—		—		—
Net OCI	$	43	$	107	$	150	$	43	$	107
Change in net unrealized gains (losses) on AFS securities
OCI activity	$	137	$	(52)	$	85	$	—	$	85
Reclassified to earnings		(2)		1		(1)		—		(1)
Net OCI	$	135	$	(51)	$	84	$	—	$	84
Change in net DVA
OCI activity	$	7	$	(1)	$	6	$	7	$	(1)
Reclassified to earnings		4		(1)		3		—		3
Net OCI	$	11	$	(2)	$	9	$	7	$	2

• Exclusive of 2018 cumulative adjustments related to the adoption of certain accounting updates in the current quarter. Refer to the table below and Note 2 for further information.

Cumulative Adjustments to Retained Earnings

Cumulative Adjustments to Retained Earnings
	Three Months Ended
$ in millions	March 31, 2018
Revenue from contracts with customers	$	(32)
Derivatives and hedging‒targeted improvements
to accounting for hedging activities		(99)
Reclassification of certain tax effects from AOCI		443
Other1		(6)
Total	$	306
	Three Months Ended
$ in millions	March 31, 2017
Improvements to employee share-based payment
accounting2		(30)
Intra-entity transfers of assets other than inventory		(5)
Total	$	(35)

• Other includes the adoption of accounting updates related to Recognition and Measurement of Financial Assets and Financial Liabilities (other than the provision around presenting unrealized DVA in OCI which we early adopted in 2016) and Derecognition of Nonfinancial Assets. The impact of these adoptions on Retained earnings was not significant.
• See Note 2 to the 2017 Form 10-K for further information.

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Earnings per Common Share (Tables)

3 Months Ended

Mar. 31, 2018

Earnings Per Share [Abstract]

Calculation of Basic and Diluted EPS

		Three Months Ended
		March 31,
in millions, except for per share data		2018		2017
Basic EPS
Income from continuing operations	$	2,706	$	1,993
Income (loss) from discontinued operations		(2)		(22)
Net income		2,704		1,971
Net income applicable to noncontrolling interests		36		41
Net income applicable to Morgan Stanley		2,668		1,930
Preferred stock dividends and other		93		90
Earnings applicable to Morgan
Stanley common shareholders	$	2,575	$	1,840
Weighted average common shares outstanding		1,740		1,801
Earnings per basic common share
Income from continuing operations	$	1.48	$	1.03
Income (loss) from discontinued operations		—		(0.01)
Earnings per basic common share	$	1.48	$	1.02
Diluted EPS
Earnings applicable to Morgan
Stanley common shareholders	$	2,575	$	1,840
Weighted average common shares outstanding		1,740		1,801
Effect of dilutive securities:
Stock options and RSUs1		31		41
Weighted average common shares
outstanding and common stock equivalents		1,771		1,842
Earnings per diluted common share
Income from continuing operations	$	1.46	$	1.01
Income (loss) from discontinued operations		(0.01)		(0.01)
Earnings per diluted common share	$	1.45	$	1.00
Weighted average antidilutive RSUs and stock options
(excluded from the computation of diluted EPS)1		1		—

1. RSUs that are considered participating securities are treated as a separate class of securities in the computation of basic EPS, and, therefore, such RSUs are not included as incremental shares in the diluted EPS computation.

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Interest Income and Interest Expense (Tables)

3 Months Ended

Mar. 31, 2018

Interest Income and Interest Expense

Schedule of Details of Interest Income and Interest Expense

		Three Months Ended
		March 31,
$ in millions		2018		2017
Interest income
Investment securities	$	424	$	326
Loans		938		748
Securities purchased under agreements to resell
and Securities borrowed1		215		(18)
Trading assets, net of Trading liabilities		540		463
Customer receivables and Other2		743		446
Total interest income	$	2,860	$	1,965
Interest expense
Deposits	$	159	$	11
Borrowings		1,138		1,022
Securities sold under agreements to repurchase
and Securities loaned3		402		248
Customer payables and Other4		186		(87)
Total interest expense	$	1,885	$	1,194
Net interest	$	975	$	771

1. Includes fees paid on Securities borrowed.

2.Includes interest from Customer receivables, Restricted cash and Interest bearing deposits with banks.

3. Includes fees received on Securities loaned.

4. Includes fees received from prime brokerage customers for stock loan transactions incurred to cover customers’ short positions.

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Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2018

Employee Benefit Plans

Components of Net Periodic Benefit Expense (Income) for Pension and Other Postretirement Plans

Components of Net Periodic Benefit Expense (Income) for Pension and Other Postretirement Plans
		Three Months Ended
		March 31,
$ in millions		2018		2017
Service cost, benefits earned during the period	$	4	$	4
Interest cost on projected benefit obligation		34		37
Expected return on plan assets		(28)		(29)
Net amortization of prior service credit		—		(4)
Net amortization of actuarial loss		6		4
Net periodic benefit expense (income)	$	16	$	12

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Segment and Geographic Information (Tables)

3 Months Ended

Mar. 31, 2018

Segment Reporting [Abstract]

Selected Financial Information by Business Segment

Selected Financial Information by Business Segment
		Three Months Ended March 31, 2018
$ in millions		IS		WM		IM		I/E		Total
Total non-interest
revenues	$	6,195	$	3,305	$	718	$	(116)	$	10,102
Interest income		1,804		1,280		1		(225)		2,860
Interest expense		1,899		211		1		(226)		1,885
Net interest		(95)		1,069		—		1		975
Net revenues	$	6,100	$	4,374	$	718	$	(115)	$	11,077
Income from continuing
operations before
income taxes	$	2,112	$	1,160	$	148	$	—	$	3,420
Provision for income taxes		449		246		19		—		714
Income from continuing
operations		1,663		914		129		—		2,706
Income (loss) from
discontinued operations,
net of income taxes		(2)		—		—		—		(2)
Net income		1,661		914		129		—		2,704
Net income applicable to
noncontrolling interests		34		—		2		—		36
Net income applicable to
Morgan Stanley	$	1,627	$	914	$	127	$	—	$	2,668

		Three Months Ended March 31, 2017
$ in millions		IS		WM		IM		I/E		Total
Total non-interest
revenues	$	5,379	$	3,064	$	608	$	(77)	$	8,974
Interest income		1,124		1,079		1		(239)		1,965
Interest expense		1,351		85		—		(242)		1,194
Net interest		(227)		994		1		3		771
Net revenues	$	5,152	$	4,058	$	609	$	(74)	$	9,745
Income from continuing
operations before
income taxes	$	1,730	$	973	$	103	$	2	$	2,808
Provision for income taxes		459		326		30		—		815
Income from continuing
operations		1,271		647		73		2		1,993
Income (loss) from
discontinued operations,
net of income taxes		(22)		—		—		—		(22)
Net income		1,249		647		73		2		1,971
Net income applicable to
noncontrolling interests		35		—		6		—		41
Net income applicable to
Morgan Stanley	$	1,214	$	647	$	67	$	2	$	1,930

I/E–Intersegment Eliminations

Total Assets by Business Segment

Total Assets by Business Segment
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Institutional Securities	$	674,785	$	664,974
Wealth Management		177,603		182,009
Investment Management		6,107		4,750
Total1	$	858,495	$	851,733

• Parent assets have been fully allocated to the business segments.

Information on Net Unrealized Carried Interest and Fee Waivers

Net Unrealized Performance-based Fees
		At		At
		March 31,		December 31,
$ in millions		2018		2017
Net cumulative unrealized
performance-based fees
at risk of reversing	$	441	$	442

Reduction of Fees due to Fee Waivers
		Three Months Ended March 31,
$ in millions		2018		2017
Fee waivers	$	18	$	23

Net Revenues by Region

Net Revenues by Region
	Three Months Ended
$ in millions	March 31, 2018		March 31, 2017
Americas	$	8,018	$	7,088
EMEA		1,708		1,489
Asia		1,351		1,168
Total	$	11,077	$	9,745

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Customer Contract Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenues from Contracts with Customers

Customer Contract Revenue by Business Segment
		Three Months Ended March 31, 2018
$ in millions		IS		WM		IM		I/E		Total
Investment banking1	$	1,308	$	140	$	—	$	(19)	$	1,429
Commissions and fees		744		498		—		(69)		1,173
Asset management		110		2,495		626		(39)		3,192
Other customer contract
revenues2		59		59		—		(2)		116
Total revenues from contracts
with customers3	$	2,221	$	3,192	$	626	$	(129)	$	5,910

• Investment banking includes revenues from underwriting equity and fixed income securities and advisory fees.
• Includes Trading and Other revenues from contracts with customers.
• Includes $902 million in total consolidated revenue recognized in the current quarter from services performed over multiple periods related primarily to investment banking advisory fees, and distribution fees.

Customer Contract Revenue by Region
	Three Months Ended
$ in millions	March 31, 2018
Americas	$	4,738
EMEA		622
Asia		550
Total	$	5,910

Change in Revenue as a Result of Application of the New Revenue Recognition Standard

Change in Revenue as a Result of Application of the New
Revenue Recognition Standard1
	Three Months Ended
$ in millions	March 31, 2018
Investment banking2	$	60
Commissions and fees		2
Asset management		9
Other customer contract revenues		12
Total change	$	83

• The accounting update requires, among other things, a gross presentation of certain costs that were previously netted against revenues. As a result, the Firm recorded an increase to net revenues and noncompensation expenses of $79 million, which was reported as follows: $72 million in the Institutional Securities business segment; $23 million in the Investment Management business segment; and $(16) million in Intersegment Eliminations related to intersegment activity.
• The effect of changing to a gross presentation on advisory fees and total underwriting fees within the Institutional Securities business segment in the current quarter was $15 million and $45 million, respectively.

Contract with Customer, Asset and Liability

Balance Sheet Amounts Related to Customer Contracts Revenue

	At		At
	March 31,		January 1,
$ in millions	2018		2018
Customer and other receivables	$	2,697	$	2,805

Other Liabilities—Contract Liabilities Rollforward
	Three Months Ended
$ in millions	March 31, 2018
January 1, 2018	$	155
Recognized contract liabilities		184
Contract liabilities recognized into revenue		(160)
March 31, 2018	$	179

Future Expected Revenues

Certain Future Expected Revenues

	At March 31, 2018
$ in millions	2018		2019		2020		Thereafter		Total
Other customer
contract revenues1	$	89	$	118	$	95	$	310	$	612

• Primarily includes commodities-related contracts with customers.

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Significant Accounting Policies (Details) $ in Millions	Jan. 01, 2018 USD ($)
Revenue from Contracts with Customers
Accounting Standards Adopted
Cumulative catch-up adjustment to Retained Earnings	$ (32)
Derivatives and Hedging-Targeted Improvements to Accounting for Hedging Activities
Accounting Standards Adopted
Cumulative catch-up adjustment to Retained Earnings	(99)
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
Accounting Standards Adopted
Cumulative catch-up adjustment to Retained Earnings	$ 443

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Fair Value Disclosures (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Assets at Fair Value
Total trading assets	$ 273,044	$ 298,282
Investment securities - AFS	56,749	55,203
Liabilities at Fair Value
Deposits	242	204
Securities sold under agreements to repurchase	792	800
Other secured financings	3,423	3,863
Borrowings	47,533	46,912
Recurring
Assets at Fair Value
U.S. treasury and agency securities	46,105	48,965
Other sovereign government obligations	27,563	28,060
State and municipal securities	3,237	3,600
MABS	2,141	2,787
Corporate and other debt	22,206	17,538
Loans and lending commitments	12,993	10,736
Corporate equities	121,007	150,355
Derivative and other contracts	33,148	30,813
Netting	(267,441)	(267,598)
Counterparty and cash collateral netting	(47,436)	(47,171)
Investments	1,866	1,840
Physical commodities	205	1,024
Total trading assets	270,471	295,718
Investment securities - AFS	56,749	55,203
Intangible assets	3	3
Total assets	327,223	350,924
Liabilities at Fair Value
Deposits	242	204
U.S. treasury and agency securities	20,214	17,826
Other sovereign government obligations	28,174	26,873
Corporate and other debt	7,890	7,144
Corporate equities	56,759	52,757
Derivative and other contracts	25,986	26,695
Netting	(256,189)	(257,144)
Counterparty and cash collateral netting	(36,184)	(36,717)
Total trading liabilities	139,023	131,295
Securities sold under agreements to repurchase	792	800
Other secured financings	3,423	3,863
Borrowings	47,533	46,912
Total liabilities	191,013	183,074
Recurring | Futures Contracts | Customer and Other Receivables, Net
Additional Fair Value Disclosure
Derivative assets, unsettled fair value	714	831
Recurring | Corporate Loans
Assets at Fair Value
Loans and lending commitments	9,346	8,358
Recurring | Residential Real Estate Loans
Assets at Fair Value
Loans and lending commitments	706	799
Recurring | Wholesale Real Estate Loans
Assets at Fair Value
Loans and lending commitments	2,941	1,579
Recurring | Interest Rate Contracts
Assets at Fair Value
Derivative and other contracts	178,269	180,939
Liabilities at Fair Value
Derivative and other contracts	161,161	163,148
Borrowings	19,744	19,230
Recurring | Credit Contracts
Assets at Fair Value
Derivative and other contracts	7,333	8,022
Liabilities at Fair Value
Derivative and other contracts	7,848	8,545
Borrowings	855	815
Recurring | Foreign Exchange Contracts
Assets at Fair Value
Derivative and other contracts	53,578	53,797
Liabilities at Fair Value
Derivative and other contracts	53,501	55,268
Borrowings	622	666
Recurring | Equity Contracts
Assets at Fair Value
Derivative and other contracts	49,542	44,990
Liabilities at Fair Value
Derivative and other contracts	50,526	47,989
Borrowings	25,181	25,903
Recurring | Commodity and Other Contracts
Assets at Fair Value
Derivative and other contracts	11,867	10,663
Liabilities at Fair Value
Derivative and other contracts	9,139	8,889
Recurring | Level 1
Assets at Fair Value
U.S. treasury and agency securities	22,675	22,077
Other sovereign government obligations	18,185	20,234
State and municipal securities	0	0
MABS	0	0
Corporate and other debt	0	0
Loans and lending commitments	0	0
Corporate equities	120,280	149,697
Derivative and other contracts	917	669
Netting	(1,665)	(2,088)
Investments	482	297
Physical commodities	0	0
Total trading assets	162,539	192,974
Investment securities - AFS	29,979	27,522
Intangible assets	0	0
Total assets	192,518	220,496
Liabilities at Fair Value
Deposits	0	0
U.S. treasury and agency securities	20,182	17,802
Other sovereign government obligations	24,281	24,857
Corporate and other debt	0	0
Corporate equities	56,667	52,653
Derivative and other contracts	1,006	332
Netting	(1,665)	(2,088)
Total trading liabilities	102,136	95,644
Securities sold under agreements to repurchase	0	0
Other secured financings	0	0
Borrowings	0	0
Total liabilities	102,136	95,644
Recurring | Level 1 | Interest Rate Contracts
Assets at Fair Value
Derivative and other contracts	989	472
Liabilities at Fair Value
Derivative and other contracts	1,043	364
Recurring | Level 1 | Credit Contracts
Assets at Fair Value
Derivative and other contracts	0	0
Liabilities at Fair Value
Derivative and other contracts	0	0
Recurring | Level 1 | Foreign Exchange Contracts
Assets at Fair Value
Derivative and other contracts	45	58
Liabilities at Fair Value
Derivative and other contracts	31	23
Recurring | Level 1 | Equity Contracts
Assets at Fair Value
Derivative and other contracts	1,165	1,101
Liabilities at Fair Value
Derivative and other contracts	1,054	1,001
Recurring | Level 1 | Commodity and Other Contracts
Assets at Fair Value
Derivative and other contracts	383	1,126
Liabilities at Fair Value
Derivative and other contracts	543	1,032
Recurring | Level 2
Assets at Fair Value
U.S. treasury and agency securities	23,430	26,888
Other sovereign government obligations	9,371	7,825
State and municipal securities	3,235	3,592
MABS	1,799	2,364
Corporate and other debt	21,392	16,837
Loans and lending commitments	4,865	4,791
Corporate equities	494	492
Derivative and other contracts	71,160	69,015
Netting	(216,759)	(216,764)
Investments	372	523
Physical commodities	205	1,024
Total trading assets	136,323	133,351
Investment securities - AFS	26,770	27,681
Intangible assets	3	3
Total assets	163,096	161,035
Liabilities at Fair Value
Deposits	198	157
U.S. treasury and agency securities	32	24
Other sovereign government obligations	3,890	2,016
Corporate and other debt	7,886	7,141
Corporate equities	60	82
Derivative and other contracts	55,939	58,581
Netting	(216,759)	(216,764)
Total trading liabilities	67,807	67,844
Securities sold under agreements to repurchase	792	650
Other secured financings	3,203	3,624
Borrowings	43,907	43,928
Total liabilities	115,907	116,203
Recurring | Level 2 | Interest Rate Contracts
Assets at Fair Value
Derivative and other contracts	176,030	178,704
Liabilities at Fair Value
Derivative and other contracts	159,538	162,239
Recurring | Level 2 | Credit Contracts
Assets at Fair Value
Derivative and other contracts	6,971	7,602
Liabilities at Fair Value
Derivative and other contracts	7,456	8,166
Recurring | Level 2 | Foreign Exchange Contracts
Assets at Fair Value
Derivative and other contracts	53,504	53,724
Liabilities at Fair Value
Derivative and other contracts	53,408	55,118
Recurring | Level 2 | Equity Contracts
Assets at Fair Value
Derivative and other contracts	44,506	40,359
Liabilities at Fair Value
Derivative and other contracts	46,616	44,666
Recurring | Level 2 | Commodity and Other Contracts
Assets at Fair Value
Derivative and other contracts	6,908	5,390
Liabilities at Fair Value
Derivative and other contracts	5,680	5,156
Recurring | Level 3
Assets at Fair Value
U.S. treasury and agency securities	0	0
Other sovereign government obligations	7	1
State and municipal securities	2	8
MABS	342	423
Corporate and other debt	814	701
Loans and lending commitments	8,128	5,945
Corporate equities	233	166
Derivative and other contracts	8,507	8,300
Netting	(1,581)	(1,575)
Investments	1,012	1,020
Physical commodities	0	0
Total trading assets	19,045	16,564
Investment securities - AFS	0	0
Intangible assets	0	0
Total assets	19,045	16,564
Liabilities at Fair Value
Deposits	44	47
U.S. treasury and agency securities	0	0
Other sovereign government obligations	3	0
Corporate and other debt	4	3
Corporate equities	32	22
Derivative and other contracts	5,225	4,499
Netting	(1,581)	(1,575)
Total trading liabilities	5,264	4,524
Securities sold under agreements to repurchase	0	150
Other secured financings	220	239
Borrowings	3,626	2,984
Total liabilities	9,154	7,944
Recurring | Level 3 | Interest Rate Contracts
Assets at Fair Value
Derivative and other contracts	1,250	1,763
Liabilities at Fair Value
Derivative and other contracts	580	545
Recurring | Level 3 | Credit Contracts
Assets at Fair Value
Derivative and other contracts	362	420
Liabilities at Fair Value
Derivative and other contracts	392	379
Recurring | Level 3 | Foreign Exchange Contracts
Assets at Fair Value
Derivative and other contracts	29	15
Liabilities at Fair Value
Derivative and other contracts	62	127
Recurring | Level 3 | Equity Contracts
Assets at Fair Value
Derivative and other contracts	3,871	3,530
Liabilities at Fair Value
Derivative and other contracts	2,856	2,322
Recurring | Level 3 | Commodity and Other Contracts
Assets at Fair Value
Derivative and other contracts	4,576	4,147
Liabilities at Fair Value
Derivative and other contracts	$ 2,916	$ 2,701

XML

Fair Value Disclosures (Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Recurring - Level 3 - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Deposits
Liabilities
Beginning balance	$ 47	$ 42
Realized and unrealized (gains) losses	(1)	1
Purchases	0	0
Sales and Issuances	9	13
Settlements	(1)	0
Net transfers	(10)	0
Ending balance	44	56
Unrealized gains (losses)	1	(1)
Securities Sold Under Agreements to Repurchase
Liabilities
Beginning balance	150	149
Realized and unrealized (gains) losses	0	(1)
Purchases	0	0
Sales and Issuances	0	0
Settlements	0	0
Net transfers	(150)	0
Ending balance	0	148
Unrealized gains (losses)	0	1
Other Secured Financings
Liabilities
Beginning balance	239	434
Realized and unrealized (gains) losses	(13)	19
Purchases	0	0
Sales and Issuances	4	13
Settlements	(10)	(220)
Net transfers	0	(43)
Ending balance	220	203
Unrealized gains (losses)	13	(12)
Borrowings
Liabilities
Beginning balance	2,984	2,014
Realized and unrealized (gains) losses	(102)	59
Purchases	0	0
Sales and Issuances	640	270
Settlements	(83)	(165)
Net transfers	187	(86)
Ending balance	3,626	2,092
Unrealized gains (losses)	99	(58)
Trading Assets | U.S. Treasury and Agency Securities
Assets
Beginning balance		74
Realized and unrealized gains (losses)		0
Purchases		42
Sales and issuances		(241)
Settlements		0
Net transfers		167
Ending balance		42
Unrealized gains (losses)		0
Trading Assets | Other Sovereign Government Obligations
Assets
Beginning balance	1	6
Realized and unrealized gains (losses)	0	0
Purchases	7	61
Sales and issuances	0	(2)
Settlements	0	0
Net transfers	(1)	0
Ending balance	7	65
Unrealized gains (losses)	0	0
Trading Assets | State and Municipal Securities
Assets
Beginning balance	8	250
Realized and unrealized gains (losses)	0	0
Purchases	1	2
Sales and issuances	(7)	(2)
Settlements	0	0
Net transfers	0	(195)
Ending balance	2	55
Unrealized gains (losses)	0	0
Trading Assets | MABS
Assets
Beginning balance	423	217
Realized and unrealized gains (losses)	77	7
Purchases	64	39
Sales and issuances	(238)	(56)
Settlements	(16)	(11)
Net transfers	32	20
Ending balance	342	216
Unrealized gains (losses)	2	(1)
Trading Assets | Loans and Lending Commitments
Assets
Beginning balance	5,945	5,122
Realized and unrealized gains (losses)	28	53
Purchases	3,740	757
Sales and issuances	(283)	(555)
Settlements	(1,218)	(985)
Net transfers	(84)	87
Ending balance	8,128	4,479
Unrealized gains (losses)	(9)	39
Trading Assets | Corporate and Other Debt
Assets
Beginning balance	701	475
Realized and unrealized gains (losses)	1	21
Purchases	350	262
Sales and issuances	(243)	(142)
Settlements	0	(1)
Net transfers	5	102
Ending balance	814	717
Unrealized gains (losses)	(1)	3
Trading Assets | Corporate Equities
Assets
Beginning balance	166	446
Realized and unrealized gains (losses)	0	(1)
Purchases	166	41
Sales and issuances	(132)	(105)
Settlements	0	0
Net transfers	33	(71)
Ending balance	233	310
Unrealized gains (losses)	(9)	3
Trading Assets | Net Derivative and Other Contracts
Assets
Beginning balance	3,801	1,788
Realized and unrealized gains (losses)	575	(192)
Purchases	187	142
Sales and issuances	(877)	(178)
Settlements	92	230
Net transfers	(496)	(194)
Ending balance	3,282	1,596
Unrealized gains (losses)	421	(227)
Trading Assets | Net Derivative and Other Contracts | Interest Rate Contracts
Assets
Beginning balance	1,218	420
Realized and unrealized gains (losses)	52	(114)
Purchases	32	46
Sales and issuances	(41)	(24)
Settlements	(81)	16
Net transfers	(510)	(46)
Ending balance	670	298
Unrealized gains (losses)	75	(127)
Trading Assets | Net Derivative and Other Contracts | Credit Contracts
Assets
Beginning balance	41	(373)
Realized and unrealized gains (losses)	(107)	(25)
Purchases	0	6
Sales and issuances	0	(5)
Settlements	38	41
Net transfers	(2)	5
Ending balance	(30)	(351)
Unrealized gains (losses)	(109)	(33)
Trading Assets | Net Derivative and Other Contracts | Foreign Exchange Contracts
Assets
Beginning balance	(112)	(43)
Realized and unrealized gains (losses)	57	(36)
Purchases	0	1
Sales and issuances	(31)	0
Settlements	33	11
Net transfers	20	(4)
Ending balance	(33)	(71)
Unrealized gains (losses)	(9)	(20)
Trading Assets | Net Derivative and Other Contracts | Equity Contracts
Assets
Beginning balance	1,208	184
Realized and unrealized gains (losses)	356	(144)
Purchases	142	83
Sales and issuances	(799)	(121)
Settlements	159	231
Net transfers	(51)	(16)
Ending balance	1,015	217
Unrealized gains (losses)	315	(81)
Trading Assets | Net Derivative and Other Contracts | Commodity and Other Contracts
Assets
Beginning balance	1,446	1,600
Realized and unrealized gains (losses)	217	127
Purchases	13	6
Sales and issuances	(6)	(28)
Settlements	(57)	(69)
Net transfers	47	(133)
Ending balance	1,660	1,503
Unrealized gains (losses)	149	34
Trading Assets | Investments
Assets
Beginning balance	1,020	958
Realized and unrealized gains (losses)	44	8
Purchases	21	62
Sales and issuances	(78)	(3)
Settlements	0	(66)
Net transfers	5	2
Ending balance	1,012	961
Unrealized gains (losses)	22	8
Trading Liabilities | Other Sovereign Government Obligations
Liabilities
Beginning balance	0
Realized and unrealized (gains) losses	0
Purchases	0
Sales and Issuances	3
Settlements	0
Net transfers	0
Ending balance	3
Unrealized gains (losses)	0
Trading Liabilities | Corporate and Other Debt
Liabilities
Beginning balance	3	36
Realized and unrealized (gains) losses	0	1
Purchases	(2)	(119)
Sales and Issuances	1	101
Settlements	0	0
Net transfers	2	17
Ending balance	4	36
Unrealized gains (losses)	0	(1)
Trading Liabilities | Corporate Equities
Liabilities
Beginning balance	22	35
Realized and unrealized (gains) losses	(4)	(12)
Purchases	(5)	(68)
Sales and Issuances	11	26
Settlements	0	0
Net transfers	8	21
Ending balance	32	2
Unrealized gains (losses)	$ 4	$ 0

XML

Fair Value Disclosures (Valuation Techniques and Sensitivity of Unobservable Inputs Used in Recurring Level 3 Fair Value Measurements) (Details) - Level 3 $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2018 USD ($) $ / MWh	Dec. 31, 2017 USD ($) $ / MWh
Recurring | MABS
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 342	$ 423
Recurring | MABS | Comparable Pricing | Minimum
Fair Value Inputs
Comparable bond price	0.00%	0.00%
Recurring | MABS | Comparable Pricing | Maximum
Fair Value Inputs
Comparable bond price	95.00%	95.00%
Recurring | MABS | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable bond price	41.00%	26.00%
Recurring | Loans and Lending Commitments
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 8,128	$ 5,945
Recurring | Loans and Lending Commitments | Comparable Pricing | Minimum
Fair Value Inputs
Comparable loan price	55.00%	55.00%
Recurring | Loans and Lending Commitments | Comparable Pricing | Maximum
Fair Value Inputs
Comparable loan price	101.00%	102.00%
Recurring | Loans and Lending Commitments | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable loan price	97.00%	95.00%
Recurring | Loans and Lending Commitments | Margin Loan Model | Minimum
Fair Value Inputs
Discount rate	0.00%	0.00%
Volatility Skew	9.00%	7.00%
Recurring | Loans and Lending Commitments | Margin Loan Model | Maximum
Fair Value Inputs
Discount rate	3.00%	3.00%
Volatility Skew	67.00%	41.00%
Recurring | Loans and Lending Commitments | Margin Loan Model | Weighted Average
Fair Value Inputs
Discount rate	1.00%	1.00%
Volatility Skew	28.00%	22.00%
Recurring | Corporate and Other Debt
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 814	$ 701
Recurring | Corporate and Other Debt | Comparable Pricing | Minimum
Fair Value Inputs
Comparable bond price	3.00%	3.00%
Recurring | Corporate and Other Debt | Comparable Pricing | Maximum
Fair Value Inputs
Comparable bond price	100.00%	134.00%
Recurring | Corporate and Other Debt | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable bond price	70.00%	59.00%
Recurring | Corporate and Other Debt | Discounted Cash Flow
Fair Value Inputs
Recovery rate	16.00%
Recurring | Corporate and Other Debt | Discounted Cash Flow | Minimum
Fair Value Inputs
Discount rate	7.00%	7.00%
Recovery rate		6.00%
Recurring | Corporate and Other Debt | Discounted Cash Flow | Maximum
Fair Value Inputs
Discount rate	20.00%	20.00%
Recovery rate		36.00%
Recurring | Corporate and Other Debt | Discounted Cash Flow | Weighted Average
Fair Value Inputs
Discount rate	15.00%	14.00%
Recovery rate		27.00%
Recurring | Corporate and Other Debt | Option Model | Minimum
Fair Value Inputs
At the money volatility	15.00%	17.00%
Recurring | Corporate and Other Debt | Option Model | Maximum
Fair Value Inputs
At the money volatility	52.00%	52.00%
Recurring | Corporate and Other Debt | Option Model | Weighted Average
Fair Value Inputs
At the money volatility	33.00%	52.00%
Recurring | Corporate Equities
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 233	$ 166
Recurring | Corporate Equities | Comparable Pricing
Fair Value Inputs
Comparable equity price	100.00%	100.00%
Recurring | Interest Rate Contracts
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 670	$ 1,218
Recurring | Interest Rate Contracts | Option Model
Fair Value Inputs
Interest rate curve		2.00%
Recurring | Interest Rate Contracts | Option Model | Simple Average
Fair Value Inputs
Inflation volatility	44.00%	44.00%
Interest rate curve	2.00%
Interest rate volatility skew	40.00%	41.00%
Recurring | Interest Rate Contracts | Option Model | Median
Fair Value Inputs
Inflation volatility	41.00%	41.00%
Interest rate curve	2.00%
Interest rate volatility skew	43.00%	47.00%
Recurring | Interest Rate Contracts | Option Model | Minimum
Fair Value Inputs
Inflation volatility	23.00%	23.00%
Interest rate curve	1.00%
Interest rate volatility skew	29.00%	31.00%
Recurring | Interest Rate Contracts | Option Model | Maximum
Fair Value Inputs
Inflation volatility	61.00%	63.00%
Interest rate curve	2.00%
Interest rate volatility skew	106.00%	97.00%
Recurring | Credit Contracts
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ (30)	$ 41
Recurring | Credit Contracts | Comparable Pricing | Minimum
Fair Value Inputs
Cash synthetic basis	10.00%	12.00%
Comparable bond price	0.00%	0.00%
Recurring | Credit Contracts | Comparable Pricing | Maximum
Fair Value Inputs
Cash synthetic basis	11.00%	13.00%
Comparable bond price	75.00%	75.00%
Recurring | Credit Contracts | Comparable Pricing | Weighted Average
Fair Value Inputs
Cash synthetic basis	11.00%	12.00%
Comparable bond price	25.00%	25.00%
Recurring | Credit Contracts | Correlation Model | Minimum
Fair Value Inputs
Credit correlation	39.00%	38.00%
Recurring | Credit Contracts | Correlation Model | Maximum
Fair Value Inputs
Credit correlation	67.00%	100.00%
Recurring | Credit Contracts | Correlation Model | Weighted Average
Fair Value Inputs
Credit correlation	50.00%	48.00%
Recurring | Foreign Exchange Contracts
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ (33)	$ (112)
Recurring | Foreign Exchange Contracts | Option Model | Simple Average
Fair Value Inputs
Contingency probability	93.00%	96.00%
Interest rate - Foreign exchange correlation	56.00%	56.00%
Interest rate volatility skew	40.00%	41.00%
Recurring | Foreign Exchange Contracts | Option Model | Median
Fair Value Inputs
Contingency probability	93.00%	95.00%
Interest rate - Foreign exchange correlation	56.00%	56.00%
Interest rate volatility skew	43.00%	47.00%
Recurring | Foreign Exchange Contracts | Option Model | Minimum
Fair Value Inputs
Contingency probability	90.00%	95.00%
Interest rate - Foreign exchange correlation	55.00%	54.00%
Interest rate volatility skew	29.00%	31.00%
Recurring | Foreign Exchange Contracts | Option Model | Maximum
Fair Value Inputs
Contingency probability	95.00%	100.00%
Interest rate - Foreign exchange correlation	57.00%	57.00%
Interest rate volatility skew	106.00%	97.00%
Recurring | Equity Contracts
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 1,015	$ 1,208
Recurring | Equity Contracts | Option Model | Simple Average
Fair Value Inputs
Equity - Interest rate correlation	18.00%	18.00%
Recurring | Equity Contracts | Option Model | Median
Fair Value Inputs
Equity - Interest rate correlation	14.00%	20.00%
Recurring | Equity Contracts | Option Model | Minimum
Fair Value Inputs
At the money volatility	14.00%	7.00%
Equity - Equity correlation	5.00%	5.00%
Equity - Foreign exchange correlation	(62.00%)	(55.00%)
Equity - Interest rate correlation	(7.00%)	(7.00%)
Volatility Skew	(3.00%)	(5.00%)
Recurring | Equity Contracts | Option Model | Maximum
Fair Value Inputs
At the money volatility	55.00%	54.00%
Equity - Equity correlation	99.00%	99.00%
Equity - Foreign exchange correlation	55.00%	40.00%
Equity - Interest rate correlation	48.00%	49.00%
Volatility Skew	0.00%	0.00%
Recurring | Equity Contracts | Option Model | Weighted Average
Fair Value Inputs
At the money volatility	35.00%	32.00%
Equity - Equity correlation	76.00%	76.00%
Equity - Foreign exchange correlation	(42.00%)	36.00%
Volatility Skew	(1.00%)	(1.00%)
Recurring | Commodity and Other Contracts
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 1,660	$ 1,446
Recurring | Commodity and Other Contracts | Option Model | Minimum
Fair Value Inputs
Commodity volatility	5.00%	7.00%
Cross commodity correlation	5.00%	5.00%
Forward power price | $ / MWh	2	4
Recurring | Commodity and Other Contracts | Option Model | Maximum
Fair Value Inputs
Commodity volatility	167.00%	205.00%
Cross commodity correlation	99.00%	99.00%
Forward power price | $ / MWh	212	102
Recurring | Commodity and Other Contracts | Option Model | Weighted Average
Fair Value Inputs
Commodity volatility	14.00%	17.00%
Cross commodity correlation	92.00%	92.00%
Forward power price | $ / MWh	30	31
Recurring | Investments
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 1,012	$ 1,020
Recurring | Investments | Comparable Pricing | Minimum
Fair Value Inputs
Comparable equity price	35.00%	45.00%
Recurring | Investments | Comparable Pricing | Maximum
Fair Value Inputs
Comparable equity price	100.00%	100.00%
Recurring | Investments | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable equity price	93.00%	92.00%
Recurring | Investments | Discounted Cash Flow | Minimum
Fair Value Inputs
Exit multiple	8	8
WACC	9.00%	8.00%
Recurring | Investments | Discounted Cash Flow | Maximum
Fair Value Inputs
Exit multiple	10	11
WACC	15.00%	15.00%
Recurring | Investments | Discounted Cash Flow | Weighted Average
Fair Value Inputs
Exit multiple	10	10
WACC	9.00%	9.00%
Recurring | Investments | Market Approach | Minimum
Fair Value Inputs
EBITDA multiple	6	6
Recurring | Investments | Market Approach | Maximum
Fair Value Inputs
EBITDA multiple	24	25
Recurring | Investments | Market Approach | Weighted Average
Fair Value Inputs
EBITDA multiple	11	11
Recurring | Securities Sold Under Agreements to Repurchase
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Liabilities	$ 0	$ 150
Recurring | Securities Sold Under Agreements to Repurchase | Discounted Cash Flow | Minimum
Fair Value Inputs
Funding spread		1.07%
Recurring | Securities Sold Under Agreements to Repurchase | Discounted Cash Flow | Maximum
Fair Value Inputs
Funding spread		1.26%
Recurring | Securities Sold Under Agreements to Repurchase | Discounted Cash Flow | Weighted Average
Fair Value Inputs
Funding spread		1.20%
Recurring | Other Secured Financings
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Liabilities	$ 220	$ 239
Recurring | Other Secured Financings | Discounted Cash Flow | Minimum
Fair Value Inputs
Funding spread	0.54%	0.39%
Recurring | Other Secured Financings | Discounted Cash Flow | Maximum
Fair Value Inputs
Funding spread	0.93%	0.76%
Recurring | Other Secured Financings | Discounted Cash Flow | Weighted Average
Fair Value Inputs
Funding spread	0.74%	0.57%
Recurring | Other Secured Financings | Option Model
Fair Value Inputs
Volatility Skew	(1.00%)	(1.00%)
Recurring | Other Secured Financings | Option Model | Minimum
Fair Value Inputs
At the money volatility	10.00%	10.00%
Recurring | Other Secured Financings | Option Model | Maximum
Fair Value Inputs
At the money volatility	40.00%	40.00%
Recurring | Other Secured Financings | Option Model | Weighted Average
Fair Value Inputs
At the money volatility	26.00%	26.00%
Recurring | Borrowings
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Liabilities	$ 3,626	$ 2,984
Recurring | Borrowings | Option Model | Minimum
Fair Value Inputs
At the money volatility	5.00%	5.00%
Equity - Equity correlation	45.00%	39.00%
Equity - Foreign exchange correlation	(43.00%)	(55.00%)
Volatility Skew	(2.00%)	(2.00%)
Recurring | Borrowings | Option Model | Maximum
Fair Value Inputs
At the money volatility	33.00%	35.00%
Equity - Equity correlation	95.00%	95.00%
Equity - Foreign exchange correlation	30.00%	10.00%
Volatility Skew	0.00%	0.00%
Recurring | Borrowings | Option Model | Weighted Average
Fair Value Inputs
At the money volatility	23.00%	22.00%
Equity - Equity correlation	81.00%	86.00%
Equity - Foreign exchange correlation	(26.00%)	(18.00%)
Volatility Skew	0.00%	0.00%
Nonrecurring | Loans
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 1,057	$ 924
Nonrecurring | Loans | Corporate Loan Model | Minimum
Fair Value Inputs
Credit spread	0.94%	0.93%
Nonrecurring | Loans | Corporate Loan Model | Maximum
Fair Value Inputs
Credit spread	4.32%	5.63%
Nonrecurring | Loans | Corporate Loan Model | Weighted Average
Fair Value Inputs
Credit spread	2.06%	2.39%
Nonrecurring | Loans | Expected Recovery | Minimum
Fair Value Inputs
Asset coverage	95.00%	95.00%
Nonrecurring | Loans | Expected Recovery | Maximum
Fair Value Inputs
Asset coverage	99.00%	99.00%
Nonrecurring | Loans | Expected Recovery | Weighted Average
Fair Value Inputs
Asset coverage	95.00%	95.00%

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Fair Value Disclosures (Measured Based on Net Asset Value) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Measured Based on Net Asset Value
Carrying value	$ 2,573	$ 2,564
Commitment	489	495
Private Equity Funds
Measured Based on Net Asset Value
Carrying value	1,678	1,674
Commitment	304	308
Carrying Value of Nonredeemable Funds by Contractual Maturity
Less than 5 years	430
5-10 years	1,054
Over 10 years	194
Total	1,678
Real Estate Funds
Measured Based on Net Asset Value
Carrying value	796	800
Commitment	181	183
Carrying Value of Nonredeemable Funds by Contractual Maturity
Less than 5 years	60
5-10 years	527
Over 10 years	209
Total	796
Hedge Funds
Measured Based on Net Asset Value
Carrying value	99	90
Commitment	$ 4	$ 4

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Fair Value Disclosures (Earnings Impact of Instruments under the Fair Value Option) (Details) - Borrowings - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Fair Value Option Quantitative Disclosures
Earnings impact	$ (76)	$ (1,744)
Trading Revenues
Fair Value Option Quantitative Disclosures
Earnings impact	26	(1,625)
Interest Income (Expense)
Fair Value Option Quantitative Disclosures
Earnings impact	$ (102)	$ (119)

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Fair Value Disclosures (Gains (Losses) Due to Changes in Instrument-Specific Credit Risk) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Fair Value disclosure
Cumulative pre-tax DVA gain (loss) recognized in AOCI	$ (1,236)		$ (1,831)
Loans and Other Debt | OCI
Fair Value disclosure
Gains (losses) due to changes in instrument-specific credit risk	0	$ 0
Loans and Other Debt | Trading Revenues
Fair Value disclosure
Gains (losses) due to changes in instrument-specific credit risk	81	(3)
Lending Commitments | OCI
Fair Value disclosure
Gains (losses) due to changes in instrument-specific credit risk	0	0
Lending Commitments | Trading Revenues
Fair Value disclosure
Gains (losses) due to changes in instrument-specific credit risk	2	0
Securities Sold Under Agreements to Repurchase | OCI
Fair Value disclosure
Gains (losses) due to changes in instrument-specific credit risk	2	(3)
Securities Sold Under Agreements to Repurchase | Trading Revenues
Fair Value disclosure
Gains (losses) due to changes in instrument-specific credit risk	0	0
Borrowings | OCI
Fair Value disclosure
Gains (losses) due to changes in instrument-specific credit risk	593	14
Borrowings | Trading Revenues
Fair Value disclosure
Gains (losses) due to changes in instrument-specific credit risk	$ (15)	$ (4)

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Fair Value Disclosures (Borrowings Measured at Fair Value) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Fair Value Measurements
Borrowings at fair value	$ 47,533	$ 46,912
Recurring
Fair Value Measurements
Borrowings at fair value	47,533	46,912
Recurring | Equity
Fair Value Measurements
Borrowings at fair value	25,181	25,903
Recurring | Interest Rates
Fair Value Measurements
Borrowings at fair value	19,744	19,230
Recurring | Foreign Exchange
Fair Value Measurements
Borrowings at fair value	622	666
Recurring | Credit Contracts
Fair Value Measurements
Borrowings at fair value	855	815
Recurring | Commodities
Fair Value Measurements
Borrowings at fair value	$ 1,131	$ 298

XML

Fair Value Disclosures (Excess of Contractual Principal Amount Over Fair Value) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Fair Value Disclosures
Loans and other debt	$ 14,843	$ 13,481
Loans 90 or more days past due and/or on nonaccrual status	11,834	11,253
Borrowings	$ 897	$ 71

XML

Fair Value Disclosures (Fair Value of Loans in Nonaccrual Status) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Fair Value Disclosures
Nonaccrual loans	$ 1,315	$ 1,240
Nonaccrual loans 90 or more days past due	$ 654	$ 779

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Fair Value Disclosures (Assets Measured at Fair Value on a Non-Recurring Basis) (Details) - Nonrecurring - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Fair Value
Loans	$ 2,409		$ 2,318
Other assets-Other investments			144
Other assets-Premises, equipment and software costs	0
Total assets	2,409		2,462
Other liabilities and accrued expenses-Lending commitments	213		196
Total liabilities	213		196
Assets
Fair Value
Gains (losses) from fair value remeasurements	0	$ 27
Loans
Fair Value
Gains (losses) from fair value remeasurements	8	32
Other Assets-Premises, Equipment and Software Costs
Fair Value
Gains (losses) from fair value remeasurements	(8)	(5)
Liabilities
Fair Value
Gains (losses) from fair value remeasurements	6	11
Other Liabilities and Accrued Expenses-Lending Commitments
Fair Value
Gains (losses) from fair value remeasurements	6	$ 11
Level 2
Fair Value
Loans	1,352		1,394
Other assets-Other investments			0
Other assets-Premises, equipment and software costs	0
Total assets	1,352		1,394
Other liabilities and accrued expenses-Lending commitments	173		158
Total liabilities	173		158
Level 3
Fair Value
Loans	1,057		924
Other assets-Other investments			144
Other assets-Premises, equipment and software costs	0
Total assets	1,057		1,068
Other liabilities and accrued expenses-Lending commitments	40		38
Total liabilities	$ 40		$ 38

XML

Fair Value Disclosures (Financial Instruments Not Measured at Fair Value) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017
Financial Assets
Cash and due from banks	$ 29,073	$ 24,816	$ 22,081
Interest bearing deposits with banks	22,980	21,348	20,773
Restricted cash	35,291	34,231	$ 36,027
Securities purchased under agreements to resell	80,246	84,258
Securities borrowed	135,835	124,010
Customer and other receivables	66,835	56,187
Loans	95,124	92,953
Financial Liabilities
Deposits	160,424	159,436
Securities sold under agreements to repurchase	51,575	56,424
Securities loaned	13,556	13,592
Other secured financings	10,275	11,271
Customer and other payables	194,924	191,510
Borrowings	194,964	192,582
Additional Disclosures
Commitment amount	117,582	100,151
Carrying Value
Financial Assets
Cash and due from banks	29,073	24,816
Interest bearing deposits with banks	22,980	21,348
Restricted cash	35,291	34,231
Investment securities - HTM securities	23,892	23,599
Securities purchased under agreements to resell	80,246	84,258
Securities borrowed	135,835	124,010
Customer and other receivables	61,017	51,269
Loans	109,135	104,126
Other assets	438	433
Financial Liabilities
Deposits	160,182	159,232
Securities sold under agreements to repurchase	50,783	55,624
Securities loaned	13,556	13,592
Other secured financings	6,852	7,408
Customer and other payables	191,332	188,464
Borrowings	147,431	145,670
Fair Value
Financial Assets
Cash and due from banks	29,073	24,816
Interest bearing deposits with banks	22,980	21,348
Restricted cash	35,291	34,231
Investment securities - HTM securities	22,919	23,081
Securities purchased under agreements to resell	80,191	84,217
Securities borrowed	135,781	124,019
Customer and other receivables	60,838	51,143
Loans	108,833	104,218
Other assets	438	433
Financial Liabilities
Deposits	160,172	159,232
Securities sold under agreements to repurchase	50,764	55,619
Securities loaned	13,623	13,592
Other secured financings	6,872	7,418
Customer and other payables	191,332	188,464
Borrowings	151,691	151,722
Additional Disclosures
Commitment amount	828	794
Fair Value | Level 1
Financial Assets
Cash and due from banks	29,073	24,816
Interest bearing deposits with banks	22,980	21,348
Restricted cash	35,291	34,231
Investment securities - HTM securities	11,327	11,119
Securities purchased under agreements to resell	0	0
Securities borrowed	0	0
Customer and other receivables	0	0
Loans	0	0
Other assets	0	0
Financial Liabilities
Deposits	0	0
Securities sold under agreements to repurchase	0	0
Securities loaned	0	0
Other secured financings	0	0
Customer and other payables	0	0
Borrowings	0	0
Fair Value | Level 2
Financial Assets
Cash and due from banks	0	0
Interest bearing deposits with banks	0	0
Restricted cash	0	0
Investment securities - HTM securities	11,270	11,673
Securities purchased under agreements to resell	80,175	78,239
Securities borrowed	135,781	124,018
Customer and other receivables	57,405	47,159
Loans	25,687	21,290
Other assets	438	433
Financial Liabilities
Deposits	160,172	159,232
Securities sold under agreements to repurchase	50,763	51,752
Securities loaned	13,623	13,191
Other secured financings	6,265	5,987
Customer and other payables	191,332	188,464
Borrowings	151,664	151,692
Additional Disclosures
Commitment amount	643	620
Fair Value | Level 3
Financial Assets
Cash and due from banks	0	0
Interest bearing deposits with banks	0	0
Restricted cash	0	0
Investment securities - HTM securities	322	289
Securities purchased under agreements to resell	16	5,978
Securities borrowed	0	1
Customer and other receivables	3,433	3,984
Loans	83,146	82,928
Other assets	0	0
Financial Liabilities
Deposits	0	0
Securities sold under agreements to repurchase	1	3,867
Securities loaned	0	401
Other secured financings	607	1,431
Customer and other payables	0	0
Borrowings	27	30
Additional Disclosures
Commitment amount	$ 185	$ 174

XML

Derivative Instruments and Hedging Activities (Derivative Fair Values) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Derivative Assets
Gross derivatives	$ 300,589	$ 298,411
Amounts offset: Counterparty netting	(224,493)	(224,768)
Amounts offset: Cash collateral netting	(42,948)	(42,830)
Total in Trading Assets	33,148	30,813
Amounts not offset: Financial instruments collateral	(12,646)	(12,363)
Amounts not offset: Other cash collateral	(20)	(4)
Net amounts	20,482	18,446
Derivative assets not subject to legally enforceable master netting or collateral agreements	3,876	3,154
Derivative Liabilities
Gross derivatives	282,175	283,839
Counterparty netting	(224,493)	(224,768)
Cash collateral netting	(31,696)	(32,376)
Total in Trading Liabilities	25,986	26,695
Amounts not offset against financial instruments collateral	(5,340)	(5,935)
Amounts not offset against other cash collateral	(64)	(32)
Net amounts	20,582	20,728
Derivative liabilities not subject to legally enforceable master netting or collateral agreements	4,366	3,751
Bilateral OTC
Derivative Assets
Gross derivatives	269,725	270,993
Amounts offset: Counterparty netting	(198,282)	(201,051)
Amounts offset: Cash collateral netting	(42,284)	(42,141)
Total in Trading Assets	29,159	27,801
Amounts not offset: Financial instruments collateral	(12,646)	(12,363)
Amounts not offset: Other cash collateral	(20)	(4)
Net amounts	16,493	15,434
Derivative Liabilities
Gross derivatives	252,134	257,471
Counterparty netting	(198,282)	(201,051)
Cash collateral netting	(31,280)	(31,892)
Total in Trading Liabilities	22,572	24,528
Amounts not offset against financial instruments collateral	(4,966)	(5,523)
Amounts not offset against other cash collateral	(38)	(18)
Net amounts	17,568	18,987
Cleared OTC
Derivative Assets
Gross derivatives	4,495	4,786
Amounts offset: Counterparty netting	(3,424)	(3,856)
Amounts offset: Cash collateral netting	(664)	(689)
Total in Trading Assets	407	241
Amounts not offset: Financial instruments collateral	0	0
Amounts not offset: Other cash collateral	0	0
Net amounts	407	241
Derivative Liabilities
Gross derivatives	4,250	4,433
Counterparty netting	(3,424)	(3,856)
Cash collateral netting	(416)	(484)
Total in Trading Liabilities	410	93
Amounts not offset against financial instruments collateral	0	0
Amounts not offset against other cash collateral	(26)	(14)
Net amounts	384	79
Exchange Traded
Derivative Assets
Gross derivatives	26,369	22,632
Amounts offset: Counterparty netting	(22,787)	(19,861)
Amounts offset: Cash collateral netting	0	0
Total in Trading Assets	3,582	2,771
Amounts not offset: Financial instruments collateral	0	0
Amounts not offset: Other cash collateral	0	0
Net amounts	3,582	2,771
Derivative Liabilities
Gross derivatives	25,791	21,935
Counterparty netting	(22,787)	(19,861)
Cash collateral netting	0	0
Total in Trading Liabilities	3,004	2,074
Amounts not offset against financial instruments collateral	(374)	(412)
Amounts not offset against other cash collateral	0	0
Net amounts	2,630	1,662
Designated as Accounting Hedges
Derivative Assets
Gross derivatives	855	1,120
Derivative Liabilities
Gross derivatives	304	197
Designated as Accounting Hedges | Bilateral OTC
Derivative Assets
Gross derivatives	847	1,114
Derivative Liabilities
Gross derivatives	281	139
Designated as Accounting Hedges | Cleared OTC
Derivative Assets
Gross derivatives	8	6
Derivative Liabilities
Gross derivatives	23	58
Designated as Accounting Hedges | Exchange Traded
Derivative Assets
Gross derivatives	0	0
Derivative Liabilities
Gross derivatives	0	0
Designated as Accounting Hedges | Interest Rate Contracts
Derivative Assets
Gross derivatives	805	1,057
Derivative Liabilities
Gross derivatives	175	68
Designated as Accounting Hedges | Interest Rate Contracts | Bilateral OTC
Derivative Assets
Gross derivatives	804	1,057
Derivative Liabilities
Gross derivatives	174	67
Designated as Accounting Hedges | Interest Rate Contracts | Cleared OTC
Derivative Assets
Gross derivatives	1	0
Derivative Liabilities
Gross derivatives	1	1
Designated as Accounting Hedges | Interest Rate Contracts | Exchange Traded
Derivative Assets
Gross derivatives	0	0
Derivative Liabilities
Gross derivatives	0	0
Designated as Accounting Hedges | Foreign Exchange Contracts
Derivative Assets
Gross derivatives	50	63
Derivative Liabilities
Gross derivatives	129	129
Designated as Accounting Hedges | Foreign Exchange Contracts | Bilateral OTC
Derivative Assets
Gross derivatives	43	57
Derivative Liabilities
Gross derivatives	107	72
Designated as Accounting Hedges | Foreign Exchange Contracts | Cleared OTC
Derivative Assets
Gross derivatives	7	6
Derivative Liabilities
Gross derivatives	22	57
Designated as Accounting Hedges | Foreign Exchange Contracts | Exchange Traded
Derivative Assets
Gross derivatives	0	0
Derivative Liabilities
Gross derivatives	0	0
Not Designated as Accounting Hedges
Derivative Assets
Gross derivatives	299,734	297,291
Derivative Liabilities
Gross derivatives	281,871	283,642
Not Designated as Accounting Hedges | Bilateral OTC
Derivative Assets
Gross derivatives	268,878	269,879
Derivative Liabilities
Gross derivatives	251,853	257,332
Not Designated as Accounting Hedges | Cleared OTC
Derivative Assets
Gross derivatives	4,487	4,780
Derivative Liabilities
Gross derivatives	4,227	4,375
Not Designated as Accounting Hedges | Exchange Traded
Derivative Assets
Gross derivatives	26,369	22,632
Derivative Liabilities
Gross derivatives	25,791	21,935
Not Designated as Accounting Hedges | Interest Rate Contracts
Derivative Assets
Gross derivatives	177,464	179,882
Derivative Liabilities
Gross derivatives	160,986	163,080
Not Designated as Accounting Hedges | Interest Rate Contracts | Bilateral OTC
Derivative Assets
Gross derivatives	175,200	177,948
Derivative Liabilities
Gross derivatives	159,276	161,758
Not Designated as Accounting Hedges | Interest Rate Contracts | Cleared OTC
Derivative Assets
Gross derivatives	1,742	1,700
Derivative Liabilities
Gross derivatives	1,267	1,178
Not Designated as Accounting Hedges | Interest Rate Contracts | Exchange Traded
Derivative Assets
Gross derivatives	522	234
Derivative Liabilities
Gross derivatives	443	144
Not Designated as Accounting Hedges | Credit Contracts
Derivative Assets
Gross derivatives	7,333	8,022
Derivative Liabilities
Gross derivatives	7,848	8,545
Not Designated as Accounting Hedges | Credit Contracts | Bilateral OTC
Derivative Assets
Gross derivatives	5,352	5,740
Derivative Liabilities
Gross derivatives	5,723	6,273
Not Designated as Accounting Hedges | Credit Contracts | Cleared OTC
Derivative Assets
Gross derivatives	1,981	2,282
Derivative Liabilities
Gross derivatives	2,125	2,272
Not Designated as Accounting Hedges | Credit Contracts | Exchange Traded
Derivative Assets
Gross derivatives	0	0
Derivative Liabilities
Gross derivatives	0	0
Not Designated as Accounting Hedges | Foreign Exchange Contracts
Derivative Assets
Gross derivatives	53,528	53,734
Derivative Liabilities
Gross derivatives	53,372	55,139
Not Designated as Accounting Hedges | Foreign Exchange Contracts | Bilateral OTC
Derivative Assets
Gross derivatives	52,711	52,878
Derivative Liabilities
Gross derivatives	52,493	54,191
Not Designated as Accounting Hedges | Foreign Exchange Contracts | Cleared OTC
Derivative Assets
Gross derivatives	764	798
Derivative Liabilities
Gross derivatives	835	925
Not Designated as Accounting Hedges | Foreign Exchange Contracts | Exchange Traded
Derivative Assets
Gross derivatives	53	58
Derivative Liabilities
Gross derivatives	44	23
Not Designated as Accounting Hedges | Equity Contracts
Derivative Assets
Gross derivatives	49,542	44,990
Derivative Liabilities
Gross derivatives	50,526	47,989
Not Designated as Accounting Hedges | Equity Contracts | Bilateral OTC
Derivative Assets
Gross derivatives	25,320	24,452
Derivative Liabilities
Gross derivatives	26,778	27,993
Not Designated as Accounting Hedges | Equity Contracts | Cleared OTC
Derivative Assets
Gross derivatives	0	0
Derivative Liabilities
Gross derivatives	0	0
Not Designated as Accounting Hedges | Equity Contracts | Exchange Traded
Derivative Assets
Gross derivatives	24,222	20,538
Derivative Liabilities
Gross derivatives	23,748	19,996
Not Designated as Accounting Hedges | Commodity and Other Contracts
Derivative Assets
Gross derivatives	11,867	10,663
Derivative Liabilities
Gross derivatives	9,139	8,889
Not Designated as Accounting Hedges | Commodity and Other Contracts | Bilateral OTC
Derivative Assets
Gross derivatives	10,295	8,861
Derivative Liabilities
Gross derivatives	7,583	7,117
Not Designated as Accounting Hedges | Commodity and Other Contracts | Cleared OTC
Derivative Assets
Gross derivatives	0	0
Derivative Liabilities
Gross derivatives	0	0
Not Designated as Accounting Hedges | Commodity and Other Contracts | Exchange Traded
Derivative Assets
Gross derivatives	1,572	1,802
Derivative Liabilities
Gross derivatives	$ 1,556	$ 1,772

XML

Derivative Instruments and Hedging Activities (Derivative Notionals) (Details) - USD ($) $ in Billions	Mar. 31, 2018	Dec. 31, 2017
Derivatives, Notional Amount
Derivative assets	$ 18,964	$ 16,460
Derivative liabilities	16,603	15,100
Bilateral OTC
Derivatives, Notional Amount
Derivative assets	7,358	6,660
Derivative liabilities	7,491	6,907
Cleared OTC
Derivatives, Notional Amount
Derivative assets	7,677	6,671
Derivative liabilities	7,390	6,587
Exchange Traded
Derivatives, Notional Amount
Derivative assets	3,929	3,129
Derivative liabilities	1,722	1,606
Designated as Accounting Hedges
Derivatives, Notional Amount
Derivative assets	51	70
Derivative liabilities	141	110
Designated as Accounting Hedges | Interest Rate Contracts
Derivatives, Notional Amount
Derivative assets	46	66
Derivative liabilities	135	104
Designated as Accounting Hedges | Foreign Exchange Contracts
Derivatives, Notional Amount
Derivative assets	5	4
Derivative liabilities	6	6
Designated as Accounting Hedges | Bilateral OTC
Derivatives, Notional Amount
Derivative assets	25	24
Derivative liabilities	6	6
Designated as Accounting Hedges | Bilateral OTC | Interest Rate Contracts
Derivatives, Notional Amount
Derivative assets	20	20
Derivative liabilities	2	2
Designated as Accounting Hedges | Bilateral OTC | Foreign Exchange Contracts
Derivatives, Notional Amount
Derivative assets	5	4
Derivative liabilities	4	4
Designated as Accounting Hedges | Cleared OTC
Derivatives, Notional Amount
Derivative assets	26	46
Derivative liabilities	135	104
Designated as Accounting Hedges | Cleared OTC | Interest Rate Contracts
Derivatives, Notional Amount
Derivative assets	26	46
Derivative liabilities	133	102
Designated as Accounting Hedges | Cleared OTC | Foreign Exchange Contracts
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	2	2
Designated as Accounting Hedges | Exchange Traded
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	0	0
Designated as Accounting Hedges | Exchange Traded | Interest Rate Contracts
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	0	0
Designated as Accounting Hedges | Exchange Traded | Foreign Exchange Contracts
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	0	0
Not Designated as Accounting Hedges
Derivatives, Notional Amount
Derivative assets	18,913	16,390
Derivative liabilities	16,462	14,990
Not Designated as Accounting Hedges | Interest Rate Contracts
Derivatives, Notional Amount
Derivative assets	15,398	13,171
Derivative liabilities	12,869	11,613
Not Designated as Accounting Hedges | Credit Contracts
Derivatives, Notional Amount
Derivative assets	255	294
Derivative liabilities	271	306
Not Designated as Accounting Hedges | Foreign Exchange Contracts
Derivatives, Notional Amount
Derivative assets	2,320	2,036
Derivative liabilities	2,296	2,143
Not Designated as Accounting Hedges | Equity Contracts
Derivatives, Notional Amount
Derivative assets	785	731
Derivative liabilities	899	799
Not Designated as Accounting Hedges | Commodity and Other Contracts
Derivatives, Notional Amount
Derivative assets	155	158
Derivative liabilities	127	129
Not Designated as Accounting Hedges | Bilateral OTC
Derivatives, Notional Amount
Derivative assets	7,333	6,636
Derivative liabilities	7,485	6,901
Not Designated as Accounting Hedges | Bilateral OTC | Interest Rate Contracts
Derivatives, Notional Amount
Derivative assets	4,449	3,999
Derivative liabilities	4,614	4,199
Not Designated as Accounting Hedges | Bilateral OTC | Credit Contracts
Derivatives, Notional Amount
Derivative assets	165	194
Derivative liabilities	188	226
Not Designated as Accounting Hedges | Bilateral OTC | Foreign Exchange Contracts
Derivatives, Notional Amount
Derivative assets	2,223	1,960
Derivative liabilities	2,184	2,014
Not Designated as Accounting Hedges | Bilateral OTC | Equity Contracts
Derivatives, Notional Amount
Derivative assets	402	397
Derivative liabilities	425	394
Not Designated as Accounting Hedges | Bilateral OTC | Commodity and Other Contracts
Derivatives, Notional Amount
Derivative assets	94	86
Derivative liabilities	74	68
Not Designated as Accounting Hedges | Cleared OTC
Derivatives, Notional Amount
Derivative assets	7,651	6,625
Derivative liabilities	7,255	6,483
Not Designated as Accounting Hedges | Cleared OTC | Interest Rate Contracts
Derivatives, Notional Amount
Derivative assets	7,472	6,458
Derivative liabilities	7,074	6,325
Not Designated as Accounting Hedges | Cleared OTC | Credit Contracts
Derivatives, Notional Amount
Derivative assets	90	100
Derivative liabilities	83	80
Not Designated as Accounting Hedges | Cleared OTC | Foreign Exchange Contracts
Derivatives, Notional Amount
Derivative assets	89	67
Derivative liabilities	98	78
Not Designated as Accounting Hedges | Cleared OTC | Equity Contracts
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	0	0
Not Designated as Accounting Hedges | Cleared OTC | Commodity and Other Contracts
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	0	0
Not Designated as Accounting Hedges | Exchange Traded
Derivatives, Notional Amount
Derivative assets	3,929	3,129
Derivative liabilities	1,722	1,606
Not Designated as Accounting Hedges | Exchange Traded | Interest Rate Contracts
Derivatives, Notional Amount
Derivative assets	3,477	2,714
Derivative liabilities	1,181	1,089
Not Designated as Accounting Hedges | Exchange Traded | Credit Contracts
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	0	0
Not Designated as Accounting Hedges | Exchange Traded | Foreign Exchange Contracts
Derivatives, Notional Amount
Derivative assets	8	9
Derivative liabilities	14	51
Not Designated as Accounting Hedges | Exchange Traded | Equity Contracts
Derivatives, Notional Amount
Derivative assets	383	334
Derivative liabilities	474	405
Not Designated as Accounting Hedges | Exchange Traded | Commodity and Other Contracts
Derivatives, Notional Amount
Derivative assets	61	72
Derivative liabilities	$ 53	$ 61

XML

Derivative Instruments and Hedging Activities (Gains (Losses) on Accounting Hedges and Trading Revenues by Product Type) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Trading Revenues by Product Type
Trading revenues	$ 3,770	$ 3,235
Borrowings
ASU 2017-12 Derivatives and Hedging-Targeted Improvements to Accounting for Hedging Activities
Carrying amount of Borrowings currently or previously hedged	107,264
Interest Rate Contracts
Trading Revenues by Product Type
Trading revenues	871	594
Foreign Exchange Contracts
Trading Revenues by Product Type
Trading revenues	261	235
Equity Security and Index Contracts
Trading Revenues by Product Type
Trading revenues	1,877	1,641
Commodity and Other Contracts
Trading Revenues by Product Type
Trading revenues	435	189
Credit Contracts
Trading Revenues by Product Type
Trading revenues	326	576
Fair Value Hedges | Interest Expense | Interest Rate Contracts
Gain (Loss) on Fair Value Hedges Recognized in Interest Expense
Gains (losses) recognized in Interest Expense	(1,841)	(805)
Fair Value Hedges | Interest Expense | Borrowings
Gain (Loss) on Fair Value Hedges Recognized in Interest Expense
Gains (losses) recognized in Interest Expense	1,852	717
Outstanding Hedges | Borrowings
ASU 2017-12 Derivatives and Hedging-Targeted Improvements to Accounting for Hedging Activities
Basis adjustments included in carrying amount	2,035
Net Investment Hedges | Foreign Exchange Contracts
Net Investment Hedges
Gains (losses) recognized in OCI	(148)	(205)
Forward points excluded from hedge effectiveness testing - Interest income	$ 7	$ (9)

XML

Derivative Instruments and Hedging Activities (Credit Risk-Related Contingencies) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Derivatives
Net derivative liabilities with credit-risk-related contingent features	$ 17,213	$ 20,675
Collateral posted	15,244	$ 16,642
Bilateral Downgrade Agreement
Derivatives
Incremental collateral or termination payments upon potential future ratings downgrade of either party	910
One-notch Downgrade
Derivatives
Incremental collateral or termination payments upon potential future ratings downgrade of either party	618
Two-notch Downgrade
Derivatives
Incremental collateral or termination payments upon potential future ratings downgrade of either party	$ 409

XML

Derivative Instruments and Hedging Activities (Credit Derivatives and Other Credit Contracts) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Protection Sold
Credit Derivatives
Notional	$ 249,199	$ 290,021
Fair value (asset)/liability	(1,567)	(1,944)
Protection Sold | Less than 1 (Year)
Credit Derivatives
Notional	81,715	88,228
Protection Sold | 1 - 3 (Years)
Credit Derivatives
Notional	69,988	81,673
Protection Sold | 3 - 5 (Years)
Credit Derivatives
Notional	58,118	94,110
Protection Sold | Over 5 (Years)
Credit Derivatives
Notional	39,378	26,010
Protection Sold | CDSs
Credit Derivatives
Notional	249,070	289,885
Fair value (asset)/liability	(1,587)	(1,960)
Protection Sold | CDSs | Less than 1 (Year)
Credit Derivatives
Notional	81,715	88,226
Protection Sold | CDSs | 1 - 3 (Years)
Credit Derivatives
Notional	69,986	81,673
Protection Sold | CDSs | 3 - 5 (Years)
Credit Derivatives
Notional	58,118	94,110
Protection Sold | CDSs | Over 5 (Years)
Credit Derivatives
Notional	39,251	25,876
Protection Sold | Single Name CDSs
Credit Derivatives
Notional	133,209	146,948
Fair value (asset)/liability	(1,148)	(1,277)
Protection Sold | Single Name CDSs | Investment Grade
Credit Derivatives
Notional	97,538	109,341
Fair value (asset)/liability	(1,124)	(1,167)
Protection Sold | Single Name CDSs | Non-investment Grade
Credit Derivatives
Notional	35,671	37,607
Fair value (asset)/liability	(24)	(110)
Protection Sold | Single Name CDSs | Less than 1 (Year)
Credit Derivatives
Notional	46,326	53,934
Protection Sold | Single Name CDSs | Less than 1 (Year) | Investment Grade
Credit Derivatives
Notional	33,332	39,721
Protection Sold | Single Name CDSs | Less than 1 (Year) | Non-investment Grade
Credit Derivatives
Notional	12,994	14,213
Protection Sold | Single Name CDSs | 1 - 3 (Years)
Credit Derivatives
Notional	49,798	58,884
Protection Sold | Single Name CDSs | 1 - 3 (Years) | Investment Grade
Credit Derivatives
Notional	35,927	42,591
Protection Sold | Single Name CDSs | 1 - 3 (Years) | Non-investment Grade
Credit Derivatives
Notional	13,871	16,293
Protection Sold | Single Name CDSs | 3 - 5 (Years)
Credit Derivatives
Notional	24,434	24,350
Protection Sold | Single Name CDSs | 3 - 5 (Years) | Investment Grade
Credit Derivatives
Notional	17,621	18,157
Protection Sold | Single Name CDSs | 3 - 5 (Years) | Non-investment Grade
Credit Derivatives
Notional	6,813	6,193
Protection Sold | Single Name CDSs | Over 5 (Years)
Credit Derivatives
Notional	12,651	9,780
Protection Sold | Single Name CDSs | Over 5 (Years) | Investment Grade
Credit Derivatives
Notional	10,658	8,872
Protection Sold | Single Name CDSs | Over 5 (Years) | Non-investment Grade
Credit Derivatives
Notional	1,993	908
Protection Sold | Total Index and Basket CDSs
Credit Derivatives
Notional	115,861	142,937
Fair value (asset)/liability	(439)	(683)
Protection Sold | Total Index and Basket CDSs | Investment Grade
Credit Derivatives
Notional	70,402	88,614
Fair value (asset)/liability	(811)	(1,091)
Protection Sold | Total Index and Basket CDSs | Non-investment Grade
Credit Derivatives
Notional	45,459	54,323
Fair value (asset)/liability	372	408
Protection Sold | Total Index and Basket CDSs | Less than 1 (Year)
Credit Derivatives
Notional	35,389	34,292
Protection Sold | Total Index and Basket CDSs | Less than 1 (Year) | Investment Grade
Credit Derivatives
Notional	29,448	29,046
Protection Sold | Total Index and Basket CDSs | Less than 1 (Year) | Non-investment Grade
Credit Derivatives
Notional	5,941	5,246
Protection Sold | Total Index and Basket CDSs | 1 - 3 (Years)
Credit Derivatives
Notional	20,188	22,789
Protection Sold | Total Index and Basket CDSs | 1 - 3 (Years) | Investment Grade
Credit Derivatives
Notional	14,049	15,418
Protection Sold | Total Index and Basket CDSs | 1 - 3 (Years) | Non-investment Grade
Credit Derivatives
Notional	6,139	7,371
Protection Sold | Total Index and Basket CDSs | 3 - 5 (Years)
Credit Derivatives
Notional	33,684	69,760
Protection Sold | Total Index and Basket CDSs | 3 - 5 (Years) | Investment Grade
Credit Derivatives
Notional	16,003	37,343
Protection Sold | Total Index and Basket CDSs | 3 - 5 (Years) | Non-investment Grade
Credit Derivatives
Notional	17,681	32,417
Protection Sold | Total Index and Basket CDSs | Over 5 (Years)
Credit Derivatives
Notional	26,600	16,096
Protection Sold | Total Index and Basket CDSs | Over 5 (Years) | Investment Grade
Credit Derivatives
Notional	10,902	6,807
Protection Sold | Total Index and Basket CDSs | Over 5 (Years) | Non-investment Grade
Credit Derivatives
Notional	15,698	9,289
Protection Sold | Index and Basket CDSs
Credit Derivatives
Notional	103,531	131,073
Fair value (asset)/liability	(163)	(341)
Protection Sold | Tranched Index and Basket
Credit Derivatives
Notional	12,330	11,864
Fair value (asset)/liability	(276)	(342)
Protection Sold | Single Name, and Non-tranched Index and Basket With Identical Underlying Reference Obligations
Credit Derivatives
Notional	233,572	274,473
Protection Sold | Other Credit Contracts
Credit Derivatives
Notional	129	136
Fair value (asset)/liability	20	16
Protection Sold | Other Credit Contracts | Less than 1 (Year)
Credit Derivatives
Notional	0	2
Protection Sold | Other Credit Contracts | 1 - 3 (Years)
Credit Derivatives
Notional	2	0
Protection Sold | Other Credit Contracts | 3 - 5 (Years)
Credit Derivatives
Notional	0	0
Protection Sold | Other Credit Contracts | Over 5 (Years)
Credit Derivatives
Notional	127	134
Protection Purchased | CDSs
Credit Derivatives
Notional	276,774	309,619
Fair value (asset)/liability	2,102	2,483
Protection Purchased | Single Name CDSs
Credit Derivatives
Notional	152,446	164,773
Fair value (asset)/liability	1,580	1,658
Protection Purchased | Index and Basket CDSs
Credit Derivatives
Notional	98,822	120,348
Fair value (asset)/liability	5	209
Protection Purchased | Tranched Index and Basket
Credit Derivatives
Notional	25,506	24,498
Fair value (asset)/liability	517	616
Protection Purchased | Single Name, and Non-tranched Index and Basket With Identical Underlying Reference Obligations
Credit Derivatives
Notional	$ 250,376	$ 281,162

XML

Investment Securities (AFS and HTM Securities) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Investment securities
Total Investment securities: Amortized cost	$ 82,037	$ 79,673
Total Investment securities: Gross unrealized gains	52	59
Total Investment securities: Gross unrealized losses	2,421	1,448
Total Investment securities: Fair value	79,668	78,284
AFS securities
AFS debt securities: Amortized cost	58,145	56,059
AFS debt securities: Gross unrealized gains	52	51
AFS debt securities: Gross unrealized losses	1,448	912
AFS debt securities: Fair value	56,749	55,198
AFS equity securities: Amortized cost	0	15
AFS equity securities: Gross unrealized gains		0
AFS equity securities: Gross unrealized losses		10
AFS equity securities: Fair value	0	5
Total AFS securities: Amortized cost	58,145	56,074
Total AFS securities: Gross unrealized gains		51
Total AFS securities: Gross unrealized losses		922
Total AFS securities: Fair value	56,749	55,203
HTM securities
HTM: Amortized Cost	23,892	23,599
HTM: Gross unrealized gains	0	8
HTM: Gross unrealized losses	973	526
HTM securities: Fair value	22,919	23,081
U.S. Government and Agency Securities
AFS securities
AFS debt securities: Amortized cost	52,116	49,645
AFS debt securities: Gross unrealized gains	32	28
AFS debt securities: Gross unrealized losses	1,337	836
AFS debt securities: Fair value	50,811	48,837
HTM securities
HTM: Amortized Cost	23,564	23,310
HTM: Gross unrealized gains	0	7
HTM: Gross unrealized losses	967	525
HTM securities: Fair value	22,597	22,792
U.S. Treasury Securities
AFS securities
AFS debt securities: Amortized cost	30,032	26,842
AFS debt securities: Gross unrealized gains	0	0
AFS debt securities: Gross unrealized losses	833	589
AFS debt securities: Fair value	29,199	26,253
HTM securities
HTM: Amortized Cost	11,817	11,424
HTM: Gross unrealized gains	0	0
HTM: Gross unrealized losses	490	305
HTM securities: Fair value	11,327	11,119
U.S. Agency Securities
AFS securities
AFS debt securities: Amortized cost	22,084	22,803
AFS debt securities: Gross unrealized gains	32	28
AFS debt securities: Gross unrealized losses	504	247
AFS debt securities: Fair value	21,612	22,584
HTM securities
HTM: Amortized Cost	11,747	11,886
HTM: Gross unrealized gains	0	7
HTM: Gross unrealized losses	477	220
HTM securities: Fair value	11,270	11,673
Corporate and Other Debt
AFS securities
AFS debt securities: Amortized cost	6,029	6,414
AFS debt securities: Gross unrealized gains	20	23
AFS debt securities: Gross unrealized losses	111	76
AFS debt securities: Fair value	5,938	6,361
HTM securities
HTM: Amortized Cost	328	289
HTM: Gross unrealized gains	0	1
HTM: Gross unrealized losses	6	1
HTM securities: Fair value	322	289
CMBS: Agency
AFS securities
AFS debt securities: Amortized cost	1,302	1,370
AFS debt securities: Gross unrealized gains	2	2
AFS debt securities: Gross unrealized losses	59	49
AFS debt securities: Fair value	1,245	1,323
CMBS: Non-Agency
AFS securities
AFS debt securities: Amortized cost	857	1,102
AFS debt securities: Gross unrealized gains	2	0
AFS debt securities: Gross unrealized losses	17	8
AFS debt securities: Fair value	842	1,094
HTM securities
HTM: Amortized Cost	328	289
HTM: Gross unrealized gains	0	1
HTM: Gross unrealized losses	6	1
HTM securities: Fair value	322	289
Corporate Bonds
AFS securities
AFS debt securities: Amortized cost	1,346	1,379
AFS debt securities: Gross unrealized gains	0	5
AFS debt securities: Gross unrealized losses	28	12
AFS debt securities: Fair value	1,318	1,372
CLO
AFS securities
AFS debt securities: Amortized cost	351	398
AFS debt securities: Gross unrealized gains	1	1
AFS debt securities: Gross unrealized losses	0	0
AFS debt securities: Fair value	352	399
FFELP Student Loan ABS
AFS securities
AFS debt securities: Amortized cost	2,173	2,165
AFS debt securities: Gross unrealized gains	15	15
AFS debt securities: Gross unrealized losses	7	7
AFS debt securities: Fair value	$ 2,181	$ 2,173
HTM securities
Percent of principal balance and interest guaranteed by the U.S. Department of Education	95.00%	95.00%

XML

Investment Securities (Investment Securities in an Unrealized Loss Position) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Investment securities
Investment securities: Fair Value, Less than 12 Months	$ 51,918	$ 46,712
Investment securities: Fair Value, 12 Months or Longer	18,608	19,563
Investment securities: Fair Value	70,526	66,275
Investment securities: Gross Unrealized Loss, Less than 12 Months	1,501	858
Investment securities: Gross Unrealized Loss, 12 Months or Longer	920	590
Investment securities: Gross Unrealized Loss	2,421	1,448
AFS Securities
AFS securities
AFS: Fair Value, Less than 12 Months	40,709	37,101
AFS: Fair Value, 12 Months or Longer	7,000	7,753
AFS: Fair Value, Total	47,709	44,854
AFS: Gross Unrealized Losses, Less than 12 Months	1,199	747
AFS: Gross Unrealized Losses, 12 Months or Longer	249	175
AFS: Gross Unrealized Losses, Total	1,448	922
AFS Debt Securities
AFS securities
AFS: Fair Value, Less than 12 Months		37,101
AFS: Fair Value, 12 Months or Longer		7,748
AFS: Fair Value, Total		44,849
AFS: Gross Unrealized Losses, Less than 12 Months		747
AFS: Gross Unrealized Losses, 12 Months or Longer		165
AFS: Gross Unrealized Losses, Total		912
AFS Debt Securities | U.S. Government and Agency Securities
AFS securities
AFS: Fair Value, Less than 12 Months	37,675	34,614
AFS: Fair Value, 12 Months or Longer	6,375	6,800
AFS: Fair Value, Total	44,050	41,414
AFS: Gross Unrealized Losses, Less than 12 Months	1,113	687
AFS: Gross Unrealized Losses, 12 Months or Longer	224	149
AFS: Gross Unrealized Losses, Total	1,337	836
AFS Debt Securities | U.S. Treasury Securities
AFS securities
AFS: Fair Value, Less than 12 Months	25,041	21,941
AFS: Fair Value, 12 Months or Longer	3,958	4,287
AFS: Fair Value, Total	28,999	26,228
AFS: Gross Unrealized Losses, Less than 12 Months	711	495
AFS: Gross Unrealized Losses, 12 Months or Longer	122	94
AFS: Gross Unrealized Losses, Total	833	589
AFS Debt Securities | U.S. Agency Securities
AFS securities
AFS: Fair Value, Less than 12 Months	12,634	12,673
AFS: Fair Value, 12 Months or Longer	2,417	2,513
AFS: Fair Value, Total	15,051	15,186
AFS: Gross Unrealized Losses, Less than 12 Months	402	192
AFS: Gross Unrealized Losses, 12 Months or Longer	102	55
AFS: Gross Unrealized Losses, Total	504	247
AFS Debt Securities | Corporate and Other Debt
AFS securities
AFS: Fair Value, Less than 12 Months	3,034	2,487
AFS: Fair Value, 12 Months or Longer	625	948
AFS: Fair Value, Total	3,659	3,435
AFS: Gross Unrealized Losses, Less than 12 Months	86	60
AFS: Gross Unrealized Losses, 12 Months or Longer	25	16
AFS: Gross Unrealized Losses, Total	111	76
AFS Debt Securities | CMBS: Agency
AFS securities
AFS: Fair Value, Less than 12 Months	910	930
AFS: Fair Value, 12 Months or Longer	0	0
AFS: Fair Value, Total	910	930
AFS: Gross Unrealized Losses, Less than 12 Months	59	49
AFS: Gross Unrealized Losses, 12 Months or Longer	0	0
AFS: Gross Unrealized Losses, Total	59	49
AFS Debt Securities | CMBS: Non-Agency
AFS securities
AFS: Fair Value, Less than 12 Months	309	257
AFS: Fair Value, 12 Months or Longer	242	559
AFS: Fair Value, Total	551	816
AFS: Gross Unrealized Losses, Less than 12 Months	7	1
AFS: Gross Unrealized Losses, 12 Months or Longer	10	7
AFS: Gross Unrealized Losses, Total	17	8
AFS Debt Securities | Corporate Bonds
AFS securities
AFS: Fair Value, Less than 12 Months	809	316
AFS: Fair Value, 12 Months or Longer	383	389
AFS: Fair Value, Total	1,192	705
AFS: Gross Unrealized Losses, Less than 12 Months	13	3
AFS: Gross Unrealized Losses, 12 Months or Longer	15	9
AFS: Gross Unrealized Losses, Total	28	12
AFS Debt Securities | FFELP Student Loan ABS
AFS securities
AFS: Fair Value, Less than 12 Months	1,006	984
AFS: Fair Value, 12 Months or Longer	0	0
AFS: Fair Value, Total	1,006	984
AFS: Gross Unrealized Losses, Less than 12 Months	7	7
AFS: Gross Unrealized Losses, 12 Months or Longer	0	0
AFS: Gross Unrealized Losses, Total	7	7
AFS Equity Securities
AFS securities
AFS: Fair Value, Less than 12 Months		0
AFS: Fair Value, 12 Months or Longer		5
AFS: Fair Value, Total		5
AFS: Gross Unrealized Losses, Less than 12 Months		0
AFS: Gross Unrealized Losses, 12 Months or Longer		10
AFS: Gross Unrealized Losses, Total		10
HTM securities
HTM securities
HTM: Fair Value, Less than 12 Months	11,209	9,611
HTM: Fair Value, 12 Months or Longer	11,608	11,810
HTM: Fair Value, Total	22,817	21,421
HTM: Gross Unrealized Losses, Less than 12 Months	302	111
HTM: Gross Unrealized Losses, 12 Months or Longer	671	415
HTM: Gross Unrealized Losses, Total	973	526
HTM securities | U.S. Government and Agency Securities
HTM securities
HTM: Fair Value, Less than 12 Months	10,989	9,487
HTM: Fair Value, 12 Months or Longer	11,608	11,810
HTM: Fair Value, Total	22,597	21,297
HTM: Gross Unrealized Losses, Less than 12 Months	296	110
HTM: Gross Unrealized Losses, 12 Months or Longer	671	415
HTM: Gross Unrealized Losses, Total	967	525
HTM securities | U.S. Treasury Securities
HTM securities
HTM: Fair Value, Less than 12 Months	6,585	6,608
HTM: Fair Value, 12 Months or Longer	4,742	4,512
HTM: Fair Value, Total	11,327	11,120
HTM: Gross Unrealized Losses, Less than 12 Months	177	86
HTM: Gross Unrealized Losses, 12 Months or Longer	313	219
HTM: Gross Unrealized Losses, Total	490	305
HTM securities | U.S. Agency Securities
HTM securities
HTM: Fair Value, Less than 12 Months	4,404	2,879
HTM: Fair Value, 12 Months or Longer	6,866	7,298
HTM: Fair Value, Total	11,270	10,177
HTM: Gross Unrealized Losses, Less than 12 Months	119	24
HTM: Gross Unrealized Losses, 12 Months or Longer	358	196
HTM: Gross Unrealized Losses, Total	477	220
HTM securities | Corporate and Other Debt
HTM securities
HTM: Fair Value, Less than 12 Months	220	124
HTM: Fair Value, 12 Months or Longer	0	0
HTM: Fair Value, Total	220	124
HTM: Gross Unrealized Losses, Less than 12 Months	6	1
HTM: Gross Unrealized Losses, 12 Months or Longer	0	0
HTM: Gross Unrealized Losses, Total	6	1
HTM securities | CMBS: Non-Agency
HTM securities
HTM: Fair Value, Less than 12 Months	220	124
HTM: Fair Value, 12 Months or Longer	0	0
HTM: Fair Value, Total	220	124
HTM: Gross Unrealized Losses, Less than 12 Months	6	1
HTM: Gross Unrealized Losses, 12 Months or Longer	0	0
HTM: Gross Unrealized Losses, Total	$ 6	$ 1

XML

Investment Securities (Investment Securities by Contractual Maturity) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Amortized Cost
AFS debt securities: Amortized cost, total	$ 58,145	$ 56,059
AFS equity securities: Amortized cost	0	15
AFS Securities: Amortized cost, total	58,145	56,074
HTM securities: Amortized cost, total	23,892	23,599
Investment securities: Amortized cost, total	82,037	79,673
Fair Value
AFS debt securities: Fair value, total	56,749	55,198
AFS equity securities: Fair value	0	5
AFS securities: Fair value, total	56,749	55,203
HTM securities: Fair value, total	22,919	23,081
Investment securities: Fair value, total	$ 79,668	78,284
Average Yield
AFS debt securities: Annualized average yield, total	1.60%
AFS securities: Annualized average yield, total	1.60%
HTM securities: Annualized average yield, total	2.20%
Investment securities: Annualized average yield, total	1.80%
U.S. Government and Agency Securities
Amortized Cost
AFS debt securities: Amortized cost, total	$ 52,116	49,645
HTM securities: Amortized cost, total	23,564	23,310
Fair Value
AFS debt securities: Fair value, total	50,811	48,837
HTM securities: Fair value, total	$ 22,597	22,792
Average Yield
AFS debt securities: Annualized average yield, total	1.60%
HTM securities: Annualized average yield, total	2.20%
U.S. Treasury Securities
Amortized Cost
AFS debt securities: Amortized cost, due within 1 year	$ 6,153
AFS debt securities: Amortized cost, after 1 year through 5 years	19,385
AFS debt securities: Amortized cost, after 5 years through 10 years	4,494
AFS debt securities: Amortized cost, total	30,032	26,842
HTM securities: Amortized cost, due within 1 year	2,027
HTM securities: Amortized cost, after 1 year through 5 years	3,952
HTM securities: Amortized cost, after 5 year through 10 years	5,112
HTM securities: Amortized cost, after 10 years	726
HTM securities: Amortized cost, total	11,817	11,424
Fair Value
AFS debt securities: Fair value, due within 1 year	6,132
AFS debt securities: Fair value, after 1 year through 5 years	18,906
AFS debt securities: Fair value, after 5 years through 10 years	4,161
AFS debt securities: Fair value, total	29,199	26,253
HTM securities: Fair value, due within 1 year	2,012
HTM securities: Fair value, after 1 year through 5 years	3,871
HTM securities: Fair value, after 5 years through 10 years	4,807
HTM securities: Fair value, after 10 years	637
HTM securities: Fair value, total	$ 11,327	11,119
Average Yield
AFS debt securities: Annualized average yield, due within 1 year	0.90%
AFS debt securities: Annualized average yield, after 1 year through 5 years	1.60%
AFS debt securities: Annualized average yield, after 5 years through 10 years	1.40%
HTM securities: Annualized average yield, due within 1 year	1.20%
HTM securities: Annualized average yield, after 1 years through 5 years	1.80%
HTM securities: Annualized average yield, after 5 years through 10 years	1.90%
HTM securities: Annualized average yield, after 10 year	2.30%
U.S. Agency Securities
Amortized Cost
AFS debt securities: Amortized cost, due within 1 year	$ 43
AFS debt securities: Amortized cost, after 1 year through 5 years	1,899
AFS debt securities: Amortized cost, after 5 years through 10 years	1,555
AFS debt securities: Amortized cost, after 10 years	18,587
AFS debt securities: Amortized cost, total	22,084	22,803
HTM securities: Amortized cost, after 5 year through 10 years	34
HTM securities: Amortized cost, after 10 years	11,713
HTM securities: Amortized cost, total	11,747	11,886
Fair Value
AFS debt securities: Fair value, due within 1 year	42
AFS debt securities: Fair value, after 1 year through 5 years	1,883
AFS debt securities: Fair value, after 5 years through 10 years	1,506
AFS debt securities: Fair value, after 10 years	18,181
AFS debt securities: Fair value, total	21,612	22,584
HTM securities: Fair value, after 5 years through 10 years	33
HTM securities: Fair value, after 10 years	11,237
HTM securities: Fair value, total	$ 11,270	11,673
Average Yield
AFS debt securities: Annualized average yield, due within 1 year	1.10%
AFS debt securities: Annualized average yield, after 1 year through 5 years	1.00%
AFS debt securities: Annualized average yield, after 5 years through 10 years	1.80%
AFS debt securities: Annualized average yield, after 10 years	2.00%
HTM securities: Annualized average yield, after 5 years through 10 years	1.90%
HTM securities: Annualized average yield, after 10 year	2.60%
Corporate and Other Debt
Amortized Cost
AFS debt securities: Amortized cost, total	$ 6,029	6,414
HTM securities: Amortized cost, total	328	289
Fair Value
AFS debt securities: Fair value, total	5,938	6,361
HTM securities: Fair value, total	$ 322	289
Average Yield
AFS debt securities: Annualized average yield, total	1.60%
HTM securities: Annualized average yield, total	3.80%
CMBS: Agency
Amortized Cost
AFS debt securities: Amortized cost, due within 1 year	$ 19
AFS debt securities: Amortized cost, after 1 year through 5 years	431
AFS debt securities: Amortized cost, after 5 years through 10 years	47
AFS debt securities: Amortized cost, after 10 years	805
AFS debt securities: Amortized cost, total	1,302	1,370
Fair Value
AFS debt securities: Fair value, due within 1 year	19
AFS debt securities: Fair value, after 1 year through 5 years	430
AFS debt securities: Fair value, after 5 years through 10 years	47
AFS debt securities: Fair value, after 10 years	749
AFS debt securities: Fair value, total	$ 1,245	1,323
Average Yield
AFS debt securities: Annualized average yield, due within 1 year	1.30%
AFS debt securities: Annualized average yield, after 1 year through 5 years	1.30%
AFS debt securities: Annualized average yield, after 5 years through 10 years	1.20%
AFS debt securities: Annualized average yield, after 10 years	1.60%
CMBS: Non-Agency
Amortized Cost
AFS debt securities: Amortized cost, after 5 years through 10 years	$ 36
AFS debt securities: Amortized cost, after 10 years	821
AFS debt securities: Amortized cost, total	857	1,102
HTM securities: Amortized cost, after 1 year through 5 years	92
HTM securities: Amortized cost, after 5 year through 10 years	217
HTM securities: Amortized cost, after 10 years	19
HTM securities: Amortized cost, total	328	289
Fair Value
AFS debt securities: Fair value, after 5 years through 10 years	35
AFS debt securities: Fair value, after 10 years	807
AFS debt securities: Fair value, total	842	1,094
HTM securities: Fair value, after 1 year through 5 years	92
HTM securities: Fair value, after 5 years through 10 years	212
HTM securities: Fair value, after 10 years	18
HTM securities: Fair value, total	$ 322	289
Average Yield
AFS debt securities: Annualized average yield, after 5 years through 10 years	2.50%
AFS debt securities: Annualized average yield, after 10 years	1.90%
HTM securities: Annualized average yield, after 1 years through 5 years	3.60%
HTM securities: Annualized average yield, after 5 years through 10 years	3.90%
HTM securities: Annualized average yield, after 10 year	4.10%
Corporate Bonds
Amortized Cost
AFS debt securities: Amortized cost, due within 1 year	$ 97
AFS debt securities: Amortized cost, after 1 year through 5 years	1,175
AFS debt securities: Amortized cost, after 5 years through 10 years	74
AFS debt securities: Amortized cost, total	1,346	1,379
Fair Value
AFS debt securities: Fair value, due within 1 year	97
AFS debt securities: Fair value, after 1 year through 5 years	1,150
AFS debt securities: Fair value, after 5 years through 10 years	71
AFS debt securities: Fair value, total	$ 1,318	1,372
Average Yield
AFS debt securities: Annualized average yield, due within 1 year	1.60%
AFS debt securities: Annualized average yield, after 1 year through 5 years	2.40%
AFS debt securities: Annualized average yield, after 5 years through 10 years	2.50%
CLO
Amortized Cost
AFS debt securities: Amortized cost, after 5 years through 10 years	$ 153
AFS debt securities: Amortized cost, after 10 years	198
AFS debt securities: Amortized cost, total	351	398
Fair Value
AFS debt securities: Fair value, after 5 years through 10 years	153
AFS debt securities: Fair value, after 10 years	199
AFS debt securities: Fair value, total	$ 352	399
Average Yield
AFS debt securities: Annualized average yield, after 5 years through 10 years	1.50%
AFS debt securities: Annualized average yield, after 10 years	2.40%
FFELP Student Loan ABS
Amortized Cost
AFS debt securities: Amortized cost, after 1 year through 5 years	$ 48
AFS debt securities: Amortized cost, after 5 years through 10 years	390
AFS debt securities: Amortized cost, after 10 years	1,735
AFS debt securities: Amortized cost, total	2,173	2,165
Fair Value
AFS debt securities: Fair value, after 1 year through 5 years	47
AFS debt securities: Fair value, after 5 years through 10 years	388
AFS debt securities: Fair value, after 10 years	1,746
AFS debt securities: Fair value, total	$ 2,181	$ 2,173
Average Yield
AFS debt securities: Annualized average yield, after 1 year through 5 years	0.80%
AFS debt securities: Annualized average yield, after 5 years through 10 years	0.80%
AFS debt securities: Annualized average yield, after 10 years	1.10%

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Collateralized Transactions (Offsetting of Certain Collateralized Transactions) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Securities Purchased under Agreements to Resell
Gross amount	$ 185,498	$ 199,044
Amounts offset	(105,252)	(114,786)
Net amount presented	80,246	84,258
Amounts not offset	(74,843)	(78,009)
Net amounts	5,403	6,249
Securities Borrowed
Gross amount	149,347	133,431
Amounts offset	(13,512)	(9,421)
Net amount presented	135,835	124,010
Amounts not offset	(132,271)	(119,358)
Net amounts	3,564	4,652
Securities Sold under Agreements to Repurchase
Gross amount	156,827	171,210
Amounts offset	(105,252)	(114,786)
Net amount presented	51,575	56,424
Amounts not offset	(45,207)	(48,067)
Net amounts	6,368	8,357
Securities Loaned
Gross amount	27,068	23,014
Amounts offset	(13,512)	(9,422)
Net amount presented	13,556	13,592
Amounts not offset	(13,336)	(13,271)
Net amounts	220	321
Not Subject to Legally Enforceable Master Netting Agreements
Securities purchased under agreements to resell	5,212	5,687
Securities borrowed	669	572
Securities sold under agreements to repurchase	5,118	6,945
Securities loaned	$ 194	$ 307

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Collateralized Transactions (Gross Secured Financing Balances) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Gross Secured Financing Balances
Securities sold under agreements to repurchase	$ 156,827	$ 171,210
Securities loaned	27,068	23,014
Total included in the offsetting disclosure	183,895	194,224
Trading liabilities - Obligation to return securities received as collateral	18,746	22,555
Total	202,641	216,779
U.S. Government and Agency Securities
Gross Secured Financing Balances
Securities sold under agreements to repurchase	37,361	43,346
Securities loaned	6	81
State and Municipal Securities
Gross Secured Financing Balances
Securities sold under agreements to repurchase	1,643	2,451
Other Sovereign Government Obligations
Gross Secured Financing Balances
Securities sold under agreements to repurchase	78,844	87,141
Securities loaned	14,077	9,489
ABS
Gross Secured Financing Balances
Securities sold under agreements to repurchase	2,204	1,130
Corporate and Other Debt
Gross Secured Financing Balances
Securities sold under agreements to repurchase	10,063	7,737
Securities loaned	28	14
Corporate Equities
Gross Secured Financing Balances
Securities sold under agreements to repurchase	25,893	28,497
Securities loaned	12,770	13,174
Trading liabilities - Obligation to return securities received as collateral	18,746	22,555
Other
Gross Secured Financing Balances
Securities sold under agreements to repurchase	819	908
Securities loaned	187	256
Trading liabilities - Obligation to return securities received as collateral	0	0
Overnight and Open
Gross Secured Financing Balances
Securities sold under agreements to repurchase	39,192	41,332
Securities loaned	16,869	12,130
Total included in the offsetting disclosure	56,061	53,462
Trading liabilities - Obligation to return securities received as collateral	18,136	22,555
Total	74,197	76,017
Less than 30 days
Gross Secured Financing Balances
Securities sold under agreements to repurchase	49,822	66,593
Securities loaned	603	873
Total included in the offsetting disclosure	50,425	67,466
Trading liabilities - Obligation to return securities received as collateral	0	0
Total	50,425	67,466
30-90 days
Gross Secured Financing Balances
Securities sold under agreements to repurchase	27,926	28,682
Securities loaned	2,045	1,577
Total included in the offsetting disclosure	29,971	30,259
Trading liabilities - Obligation to return securities received as collateral	610	0
Total	30,581	30,259
Over 90 days
Gross Secured Financing Balances
Securities sold under agreements to repurchase	39,887	34,603
Securities loaned	7,551	8,434
Total included in the offsetting disclosure	47,438	43,037
Trading liabilities - Obligation to return securities received as collateral	0	0
Total	$ 47,438	$ 43,037

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Collateralized Transactions (Assets Pledged) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Collateralized Transactions
Trading assets	$ 34,590	$ 31,324
Loans (gross of allowance for loan losses)	342	228
Total	$ 34,932	$ 31,552

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Collateralized Transactions (Collateral Received) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Collateralized Transactions
Collateral with rights to sell or repledge	$ 597,886	$ 599,244
Collateral that was sold or repledged	$ 471,985	$ 475,113

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Collateralized Transactions (Customer Margin Lending and Other) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Collateralized Transactions
Net customer receivables representing margin loans	$ 34,382	$ 32,112

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Collateralized Transactions (Restricted Cash and Segregated Securities) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017
Collateralized Transactions
Restricted cash	$ 35,291	$ 34,231	$ 36,027
Segregated securities	18,917	20,549
Total	$ 54,208	$ 54,780

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Loans and Allowance for Credit Losses (Loans Held for Investment and Held for Sale) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Loans Held for Investment
Loans held for investment, gross	$ 95,367	$ 93,177
Allowance for loan losses	(243)	(224)	$ (297)	$ (274)
Loans held for investment, net	95,124	92,953
Loans Held for Sale
Loans held for sale, gross	14,011	11,173
Allowance for loan losses	0	0
Loans held for sale, net	14,011	11,173
Total Loans
Total loans, gross	109,378	104,350
Allowance for loan losses	(243)	(224)
Total loans, net	109,135	104,126
Loans at fixed interest rates	14,252	13,339
Loans at floating or adjustable interest rates	94,883	90,787
Non-U.S.
Total Loans
Total loans, net	16,110	9,977
Pass
Loans Held for Investment
Loans held for investment, gross	93,817	92,010
Special Mention
Loans Held for Investment
Loans held for investment, gross	627	394
Substandard
Loans Held for Investment
Loans held for investment, gross	914	766
Doubtful
Loans Held for Investment
Loans held for investment, gross	9	7
Loss
Loans Held for Investment
Loans held for investment, gross	0	0
Corporate
Loans Held for Investment
Loans held for investment, gross	31,903	29,754
Allowance for loan losses	(131)	(126)	(209)	(195)
Loans Held for Sale
Loans held for sale, gross	12,000	9,456
Total Loans
Total loans, gross	43,903	39,210
Corporate | Pass
Loans Held for Investment
Loans held for investment, gross	31,327	29,166
Corporate | Special Mention
Loans Held for Investment
Loans held for investment, gross	162	188
Corporate | Substandard
Loans Held for Investment
Loans held for investment, gross	405	393
Corporate | Doubtful
Loans Held for Investment
Loans held for investment, gross	9	7
Corporate | Loss
Loans Held for Investment
Loans held for investment, gross	0	0
Consumer
Loans Held for Investment
Loans held for investment, gross	26,877	26,808
Allowance for loan losses	(4)	(4)	(4)	(4)
Loans Held for Sale
Loans held for sale, gross	0	0
Total Loans
Total loans, gross	26,877	26,808
Consumer | Pass
Loans Held for Investment
Loans held for investment, gross	26,872	26,802
Consumer | Special Mention
Loans Held for Investment
Loans held for investment, gross	5	6
Consumer | Substandard
Loans Held for Investment
Loans held for investment, gross	0	0
Consumer | Doubtful
Loans Held for Investment
Loans held for investment, gross	0	0
Consumer | Loss
Loans Held for Investment
Loans held for investment, gross	0	0
Residential Real Estate
Loans Held for Investment
Loans held for investment, gross	26,566	26,635
Allowance for loan losses	(23)	(24)	(20)	(20)
Loans Held for Sale
Loans held for sale, gross	33	35
Total Loans
Total loans, gross	26,599	26,670
Residential Real Estate | Pass
Loans Held for Investment
Loans held for investment, gross	26,492	26,562
Residential Real Estate | Special Mention
Loans Held for Investment
Loans held for investment, gross	0	0
Residential Real Estate | Substandard
Loans Held for Investment
Loans held for investment, gross	74	73
Residential Real Estate | Doubtful
Loans Held for Investment
Loans held for investment, gross	0	0
Residential Real Estate | Loss
Loans Held for Investment
Loans held for investment, gross	0	0
Wholesale Real Estate
Loans Held for Investment
Loans held for investment, gross	10,021	9,980
Allowance for loan losses	(85)	(70)	$ (64)	$ (55)
Loans Held for Sale
Loans held for sale, gross	1,978	1,682
Total Loans
Total loans, gross	11,999	11,662
Wholesale Real Estate | Pass
Loans Held for Investment
Loans held for investment, gross	9,126	9,480
Wholesale Real Estate | Special Mention
Loans Held for Investment
Loans held for investment, gross	460	200
Wholesale Real Estate | Substandard
Loans Held for Investment
Loans held for investment, gross	435	300
Wholesale Real Estate | Doubtful
Loans Held for Investment
Loans held for investment, gross	0	0
Wholesale Real Estate | Loss
Loans Held for Investment
Loans held for investment, gross	$ 0	$ 0

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Loans and Allowance for Credit Losses (Impaired Loans) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Impaired Loans
Loans: With allowance	$ 15	$ 16
Loans: Without allowance	118	163
Loans: UPB	146	192
Lending Commitments: Without allowance	226	199
Impaired loans	133	179
Allowance for loan losses	243	224
Americas
Impaired Loans
Impaired loans	129	160
Allowance for loan losses	199	194
EMEA
Impaired Loans
Impaired loans	0	9
Allowance for loan losses	42	27
Asia
Impaired Loans
Impaired loans	4	10
Allowance for loan losses	2	3
Corporate
Impaired Loans
Loans: With allowance	15	16
Loans: Without allowance	69	118
Loans: UPB	95	146
Lending Commitments: Without allowance	226	199
Residential Real Estate
Impaired Loans
Loans: With allowance	0	0
Loans: Without allowance	49	45
Loans: UPB	51	46
Lending Commitments: Without allowance	$ 0	$ 0

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Loans and Allowance for Credit Losses (TDR) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Troubled Debt Restructurings
Loans	$ 52	$ 51
Lending commitments	25	28
Allowance for loan losses and lending commitments	$ 6	$ 10

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Loans and Allowance for Credit Losses (Allowance for Loan Losses and Lending Commitments Rollforward) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Allowance for loan losses rollforward
Beginning balance	$ 224	$ 274
Recoveries		1
Provision (release)	19	22
Other	0
Ending balance	243	297
Inherent	238	230
Specific	5	67
Allowance for lending commitments rollforward
Beginning balance	198	190
Provision for (release of) lending commitments	7	3
Other	0
Ending balance	205	193
Inherent	204	191
Specific	1	2
Corporate
Allowance for loan losses rollforward
Beginning balance	126	195
Recoveries		1
Provision (release)	6	13
Other	(1)
Ending balance	131	209
Inherent	126	142
Specific	5	67
Allowance for lending commitments rollforward
Beginning balance	194	185
Provision for (release of) lending commitments	7	3
Other	0
Ending balance	201	188
Inherent	200	186
Specific	1	2
Consumer
Allowance for loan losses rollforward
Beginning balance	4	4
Recoveries		0
Provision (release)	0	0
Other	0
Ending balance	4	4
Inherent	4	4
Specific	0	0
Allowance for lending commitments rollforward
Beginning balance	1	1
Provision for (release of) lending commitments	0	0
Other	0
Ending balance	1	1
Inherent	1	1
Specific	0	0
Residential Real Estate
Allowance for loan losses rollforward
Beginning balance	24	20
Recoveries		0
Provision (release)	(1)	0
Other	0
Ending balance	23	20
Inherent	23	20
Specific	0	0
Allowance for lending commitments rollforward
Beginning balance	0	0
Provision for (release of) lending commitments	0	0
Other	0
Ending balance	0	0
Inherent	0	0
Specific	0	0
Wholesale Real Estate
Allowance for loan losses rollforward
Beginning balance	70	55
Recoveries		0
Provision (release)	14	9
Other	1
Ending balance	85	64
Inherent	85	64
Specific	0	0
Allowance for lending commitments rollforward
Beginning balance	3	4
Provision for (release of) lending commitments	0	0
Other	0
Ending balance	3	4
Inherent	3	4
Specific	$ 0	$ 0

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Loans and Allowance for Credit Losses (Employee Loans) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Employee Loans
Balance	$ 3,687	$ 4,185
Allowance for loan losses	(75)	(77)
Balance, net	$ 3,612	$ 4,108
Minimum
Employee Loans
Employee loan repayment terms	1 year	1 year
Maximum
Employee Loans
Employee loan repayment terms	20 years	20 years

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Equity Method Investments (Equity Method Investment Balances) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Equity Method Investments and Joint Ventures
Equity method investments	$ 2,662		$ 2,623
Income (loss) from equity method investments	$ 50	$ 9

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Equity Method Investments (Investees) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Equity Method Investments
Income from equity method investments	$ 50	$ 9
MUMSS
Equity Method Investments
Voting interest	40.00%
Income from equity method investments	$ 56	$ 48
MUFG | MUMSS
Equity Method Investments
Voting interest	60.00%

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Deposits (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Deposits [Abstract]
Savings and demand deposits	$ 138,358	$ 144,487
Time deposits	22,066	14,949
Total	160,424	159,436
Deposits subject to FDIC insurance	129,968	127,017
Time deposits that equal or exceed the FDIC insurance limit	10	$ 38
Time Deposit Maturities
2018	13,164
2019	4,803
2020	2,257
2021	747
2022	418
Thereafter	$ 677

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Borrowings and Other Secured Financings (Long-Term Borrowings) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Borrowings and Other Secured Financings
Original maturities of one year or less	$ 1,256	$ 1,519
Original maturities greater than one year
Senior	183,712	180,835
Subordinated	9,996	10,228
Total	193,708	191,063
Total borrowings	$ 194,964	$ 192,582
Weighted average stated maturity, in years	6 years 7 months	6 years 7 months

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Borrowings and Other Secured Financings (Other Secured Financings) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Borrowings and Other Secured Financings
Secured financings with original maturities greater than one year	$ 8,159	$ 8,685
Secured financings with original maturities one year or less	1,406	2,034
Failed sales	710	552
Total other secured financings	$ 10,275	$ 11,271

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Commitments, Guarantees and Contingencies (Commitments) (Details) $ in Millions	Mar. 31, 2018 USD ($)
Commitment, Fiscal Year Maturity
Less than 1 (year)	$ 107,698
1-3 (years)	44,079
3-5 (years)	46,747
Over 5 (years)	9,164
Total	207,688
Corporate Lending
Commitment, Fiscal Year Maturity
Commitments participated to third parties	6,877
Forward-starting Secured Financing Receivables
Commitment, Fiscal Year Maturity
Less than 1 (year)	85,399
1-3 (years)	0
3-5 (years)	0
Over 5 (years)	1,177
Total	86,576
Commitments settled within three business days	72,754
Underwriting
Commitment, Fiscal Year Maturity
Less than 1 (year)	344
1-3 (years)	0
3-5 (years)	0
Over 5 (years)	0
Total	344
Investment Activities
Commitment, Fiscal Year Maturity
Less than 1 (year)	527
1-3 (years)	96
3-5 (years)	62
Over 5 (years)	230
Total	915
Letters of Credit and Other Financial Guarantees
Commitment, Fiscal Year Maturity
Less than 1 (year)	195
1-3 (years)	0
3-5 (years)	1
Over 5 (years)	41
Total	237
Lending Commitments | Corporate Lending
Commitment, Fiscal Year Maturity
Less than 1 (year)	14,447
1-3 (years)	43,086
3-5 (years)	46,618
Over 5 (years)	7,454
Total	111,605
Lending Commitments | Consumer Lending
Commitment, Fiscal Year Maturity
Less than 1 (year)	6,598
1-3 (years)	0
3-5 (years)	8
Over 5 (years)	3
Total	6,609
Lending Commitments | Residential Real Estate Lending
Commitment, Fiscal Year Maturity
Less than 1 (year)	5
1-3 (years)	64
3-5 (years)	33
Over 5 (years)	259
Total	361
Lending Commitments | Wholesale Real Estate Lending
Commitment, Fiscal Year Maturity
Less than 1 (year)	183
1-3 (years)	833
3-5 (years)	25
Over 5 (years)	0
Total	$ 1,041

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Commitments, Guarantees and Contingencies (Obligations under Guarantee Arrangements) (Details) $ in Millions	Mar. 31, 2018 USD ($)
Credit Derivatives
Guarantees
Maximum potential payout/notional	$ 249,070
Carrying amount: (asset)	(1,587)
Collateral/recourse	0
Credit Derivatives | Less than 1 (Year)
Guarantees
Maximum potential payout/notional	81,715
Credit Derivatives | 1 - 3 (Years)
Guarantees
Maximum potential payout/notional	69,986
Credit Derivatives | 3 - 5 (Years)
Guarantees
Maximum potential payout/notional	58,118
Credit Derivatives | Over 5 (Years)
Guarantees
Maximum potential payout/notional	39,251
Other Credit Contracts
Guarantees
Maximum potential payout/notional	129
Carrying amount: liability	20
Collateral/recourse	0
Other Credit Contracts | Less than 1 (Year)
Guarantees
Maximum potential payout/notional	0
Other Credit Contracts | 1 - 3 (Years)
Guarantees
Maximum potential payout/notional	2
Other Credit Contracts | 3 - 5 (Years)
Guarantees
Maximum potential payout/notional	0
Other Credit Contracts | Over 5 (Years)
Guarantees
Maximum potential payout/notional	127
Non-credit Derivatives
Guarantees
Maximum potential payout/notional	4,119,239
Carrying amount: liability	45,314
Collateral/recourse	0
Non-credit Derivatives | Less than 1 (Year)
Guarantees
Maximum potential payout/notional	1,903,988
Non-credit Derivatives | 1 - 3 (Years)
Guarantees
Maximum potential payout/notional	1,196,331
Non-credit Derivatives | 3 - 5 (Years)
Guarantees
Maximum potential payout/notional	379,171
Non-credit Derivatives | Over 5 (Years)
Guarantees
Maximum potential payout/notional	639,749
Standby Letters of Credit and Other Financial Guarantees Issued
Guarantees
Maximum potential payout/notional	8,095
Carrying amount: (asset)	(182)
Collateral/recourse	6,588
Standby letters of credit	700
Standby Letters of Credit and Other Financial Guarantees Issued | Less than 1 (Year)
Guarantees
Maximum potential payout/notional	806
Standby Letters of Credit and Other Financial Guarantees Issued | 1 - 3 (Years)
Guarantees
Maximum potential payout/notional	1,114
Standby Letters of Credit and Other Financial Guarantees Issued | 3 - 5 (Years)
Guarantees
Maximum potential payout/notional	1,272
Standby Letters of Credit and Other Financial Guarantees Issued | Over 5 (Years)
Guarantees
Maximum potential payout/notional	4,903
Market Value Guarantees
Guarantees
Maximum potential payout/notional	160
Carrying amount: liability	0
Collateral/recourse	0
Market Value Guarantees | Less than 1 (Year)
Guarantees
Maximum potential payout/notional	40
Market Value Guarantees | 1 - 3 (Years)
Guarantees
Maximum potential payout/notional	62
Market Value Guarantees | 3 - 5 (Years)
Guarantees
Maximum potential payout/notional	58
Market Value Guarantees | Over 5 (Years)
Guarantees
Maximum potential payout/notional	0
Liquidity Facilities
Guarantees
Maximum potential payout/notional	3,367
Carrying amount: (asset)	(5)
Collateral/recourse	5,475
Liquidity Facilities | Less than 1 (Year)
Guarantees
Maximum potential payout/notional	3,367
Liquidity Facilities | 1 - 3 (Years)
Guarantees
Maximum potential payout/notional	0
Liquidity Facilities | 3 - 5 (Years)
Guarantees
Maximum potential payout/notional	0
Liquidity Facilities | Over 5 (Years)
Guarantees
Maximum potential payout/notional	0
Whole Loan Sales Guarantees
Guarantees
Maximum potential payout/notional	23,225
Carrying amount: liability	8
Collateral/recourse	0
Whole Loan Sales Guarantees | Less than 1 (Year)
Guarantees
Maximum potential payout/notional	0
Whole Loan Sales Guarantees | 1 - 3 (Years)
Guarantees
Maximum potential payout/notional	1
Whole Loan Sales Guarantees | 3 - 5 (Years)
Guarantees
Maximum potential payout/notional	1
Whole Loan Sales Guarantees | Over 5 (Years)
Guarantees
Maximum potential payout/notional	23,223
Securitizations Representations and Warranties
Guarantees
Maximum potential payout/notional	60,861
Carrying amount: liability	91
Collateral/recourse	0
Securitizations Representations and Warranties | Less than 1 (Year)
Guarantees
Maximum potential payout/notional	0
Securitizations Representations and Warranties | 1 - 3 (Years)
Guarantees
Maximum potential payout/notional	0
Securitizations Representations and Warranties | 3 - 5 (Years)
Guarantees
Maximum potential payout/notional	0
Securitizations Representations and Warranties | Over 5 (Years)
Guarantees
Maximum potential payout/notional	60,861
General Partner Guarantees
Guarantees
Maximum potential payout/notional	436
Carrying amount: liability	59
Collateral/recourse	0
General Partner Guarantees | Less than 1 (Year)
Guarantees
Maximum potential payout/notional	33
General Partner Guarantees | 1 - 3 (Years)
Guarantees
Maximum potential payout/notional	52
General Partner Guarantees | 3 - 5 (Years)
Guarantees
Maximum potential payout/notional	324
General Partner Guarantees | Over 5 (Years)
Guarantees
Maximum potential payout/notional	$ 27

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Commitments, Guarantees and Contingencies (Contingencies) (Details) - 3 months ended Mar. 31, 2018 - Pending Litigation € in Millions, $ in Millions	EUR (€)	USD ($)
China Development Industrial Bank v. Morgan Stanley & Co. Incorporated et al.
Loss Contingencies
Lawsuit filing date	Jul. 15, 2010
Name of plaintiff	China Development Industrial Bank (“CDIB”)
Name of defendant	The Firm
Domicile of litigation	The Supreme Court of the State of New York, New York County (“Supreme Court of NY”)
Allegations	The complaint relates to a $275 million CDS referencing the super senior portion of the STACK 2006-1 CDO. The complaint asserts claims for common law fraud, fraudulent inducement and fraudulent concealment and alleges that the Firm misrepresented the risks of the STACK 2006-1 CDO to CDIB, and that the Firm knew that the assets backing the CDO were of poor quality when it entered into the CDS with CDIB.
Damages sought	The complaint seeks compensatory damages related to the approximately $228 million that CDIB alleges it has already lost under the CDS, rescission of CDIB’s obligation to pay an additional $12 million, punitive damages, equitable relief, fees and costs.
China Development Industrial Bank v. Morgan Stanley & Co. Incorporated et al. | Maximum
Loss Contingencies
Estimate of possible loss		$ 240
Deutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al.
Loss Contingencies
Lawsuit filing date	May 03, 2013
Name of defendant	The Firm
Domicile of litigation	The Supreme Court of NY
Allegations	The complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by the Firm to plaintiff was approximately $634 million. The complaint alleges causes of action against the Firm for common law fraud, fraudulent concealment, aiding and abetting fraud, negligent misrepresentation, and rescission.
Damages sought	The complaint seeks, among other things, compensatory and punitive damages.
Request for information	At March 25, 2018, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $211 million, and the certificates had incurred actual losses of approximately $89 million.
US Bank National Association, solely in its capacity as Trustee of the Morgan Stanley Mortgage Loan Trust 2007-2AX (MSM 2007-2AX) v. Morgan Stanley Mortgage Capital Holdings LLC, as Successor-by-Merger to Morgan Stanley Mortgage Capital Inc. and GreenPoint Mortgage Funding, Inc.
Loss Contingencies
Lawsuit filing date	Jul. 08, 2013
Name of plaintiff	U.S. Bank National Association
Name of defendant	The Firm
Domicile of litigation	The Supreme Court of NY
Allegations	The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $650 million, breached various representations and warranties.
Damages sought	The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, unspecified damages and interest.
US Bank National Association, solely in its capacity as Trustee of the Morgan Stanley Mortgage Loan Trust 2007-2AX (MSM 2007-2AX) v. Morgan Stanley Mortgage Capital Holdings LLC, as Successor-by-Merger to Morgan Stanley Mortgage Capital Inc. and GreenPoint Mortgage Funding, Inc. | Maximum
Loss Contingencies
Estimate of possible loss		240
Wilmington Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC et al.
Loss Contingencies
Lawsuit filing date	Dec. 30, 2013
Name of plaintiff	Wilmington Trust Company
Name of defendant	The Firm
Domicile of litigation	The Supreme Court of NY
Allegations	The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $516 million, breached various representations and warranties.
Damages sought	The complaint seeks, among other relief, unspecified damages, attorneys’ fees, interest and costs.
Wilmington Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC et al. | Maximum
Loss Contingencies
Estimate of possible loss		152
Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. (NIMS 2007-1)
Loss Contingencies
Lawsuit filing date	Sep. 19, 2014
Name of plaintiff	Financial Guaranty Insurance Company (“FGIC”)
Name of defendant	The Firm
Domicile of litigation	The Supreme Court of NY
Allegations	The complaint asserts claims for breach of contract and alleges, among other things, that the net interest margin securities (“NIMS”) in the trust breached various representations and warranties. FGIC issued a financial guaranty policy with respect to certain notes that had an original balance of approximately $475 million.
Damages sought	The complaint seeks, among other relief, specific performance of the NIMS breach remedy procedures in the transaction documents, unspecified damages, reimbursement of certain payments made pursuant to the transaction documents, attorneys’ fees and interest.
Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. (NIMS 2007-1) | Maximum
Loss Contingencies
Estimate of possible loss		126
Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. (Trust 2007-NC4)
Loss Contingencies
Lawsuit filing date	Sep. 23, 2014
Name of plaintiff	FGIC
Name of defendant	The Firm
Domicile of litigation	The Supreme Court of NY
Allegations	The complaint asserts claims for breach of contract and fraudulent inducement and alleges, among other things, that the loans in the trust breached various representations and warranties and defendants made untrue statements and material omissions to induce FGIC to issue a financial guaranty policy on certain classes of certificates that had an original balance of approximately $876 million.
Damages sought	The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, compensatory, consequential and punitive damages, attorneys’ fees and interest.
Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. (Trust 2007-NC4) | Maximum
Loss Contingencies
Estimate of possible loss		277
Deutsche Bank National Trust Company solely in its capacity as Trustee of the Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 v. Morgan Stanley Mortgage Capital Holdings LLC as Successor-by-Merger to Morgan Stanley Mortgage Capital Inc., and Morgan Stanley ABS Capital I Inc.
Loss Contingencies
Lawsuit filing date	Jan. 23, 2015
Name of plaintiff	Deutsche Bank National Trust Company
Name of defendant	The Firm
Domicile of litigation	The Supreme Court of NY
Allegations	The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $1.05 billion, breached various representations and warranties.
Damages sought	The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, compensatory, consequential, rescissory, equitable and punitive damages, attorneys’ fees, costs and other related expenses, and interest.
Deutsche Bank National Trust Company solely in its capacity as Trustee of the Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 v. Morgan Stanley Mortgage Capital Holdings LLC as Successor-by-Merger to Morgan Stanley Mortgage Capital Inc., and Morgan Stanley ABS Capital I Inc. | Maximum
Loss Contingencies
Estimate of possible loss		277
Case Number 15/3637 and Case Number 15/4353
Loss Contingencies
Name of plaintiff	The Dutch Tax Authority (“Dutch Authority”)
Name of defendant	The Firm
Domicile of litigation	The District Court in Amsterdam
Allegations	The prior set-off by the Firm of approximately €124 million (approximately $152 million) plus accrued interest of withholding tax credits against the Firm’s corporation tax liabilities for the tax years 2007 to 2013. The Dutch Authority alleges that the Firm was not entitled to receive the withholding tax credits on the basis, inter alia, that a Firm subsidiary did not hold legal title to certain securities subject to withholding tax on the relevant dates. The Dutch Authority has also alleged that the Firm failed to provide certain information to the Dutch Authority and keep adequate books and records.
Case Number 15/3637 and Case Number 15/4353 | Maximum
Loss Contingencies
Estimate of possible loss	€ 124	$ 152

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Variable Interest Entities and Securitization Activities (Consolidated VIEs) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Variable Interest Entity
VIE assets	$ 3,313	$ 1,801
VIE liabilities	1,329	463
OSF
Variable Interest Entity
VIE assets	361	378
VIE liabilities	1	3
MABS
Variable Interest Entity
VIE assets	234	249
VIE liabilities	197	210
Other
Variable Interest Entity
VIE assets	2,718	1,174
VIE liabilities	$ 1,131	$ 250

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Variable Interest Entities and Securitization Activities (Assets and Liabilities by Balance Sheet Caption) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017
Cash and cash equivalents:
Cash and due from banks	$ 29,073	$ 24,816	$ 22,081
Restricted cash	35,291	34,231	$ 36,027
Trading assets at fair value	273,044	298,282
Customer and other receivables	66,835	56,187
Goodwill	6,706	6,597
Intangible assets	2,427	2,448
Other assets	16,282	16,628
Total assets	858,495	851,733
Liabilities
Other secured financings at fair value	3,423	3,863
Other liabilities and accrued expenses	14,265	17,157
Total liabilities	779,006	773,267
Noncontrolling interests	1,455	1,075
Consolidated VIEs
Cash and cash equivalents:
Cash and due from banks	103	69
Restricted cash	223	222
Trading assets at fair value	2,345	833
Customer and other receivables	21	19
Goodwill	18	18
Intangible assets	149	155
Other assets	454	485
Total assets	3,313	1,801
Liabilities
Other secured financings at fair value	1,305	438
Other liabilities and accrued expenses	24	25
Total liabilities	1,329	463
Noncontrolling interests	$ 494	$ 189

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Variable Interest Entities and Securitization Activities (Non-Consolidated VIEs) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Variable Interest Entity
Additional VIE assets issued by securitization SPEs	$ 12,314	$ 11,318
MABS
Variable Interest Entity
VIE assets (UPB)	76,854	89,288
Maximum exposure to loss	9,957	11,871
Residential Mortgage
Variable Interest Entity
VIE assets (UPB)	13,564	15,636
Commercial Mortgage
Variable Interest Entity
VIE assets (UPB)	35,886	46,464
U.S. Agency CMO
Variable Interest Entity
VIE assets (UPB)	14,405	16,223
Other Consumer or Commercial Loans
Variable Interest Entity
VIE assets (UPB)	12,999	10,965
CDO
Variable Interest Entity
VIE assets (UPB)	14,445	9,807
Maximum exposure to loss	3,065	2,052
MTOB
Variable Interest Entity
VIE assets (UPB)	5,439	5,306
Maximum exposure to loss	3,448	3,413
OSF
Variable Interest Entity
VIE assets (UPB)	3,307	3,322
Maximum exposure to loss	1,750	1,792
Other
Variable Interest Entity
VIE assets (UPB)	19,959	31,934
Maximum exposure to loss	7,298	6,849
Assets | MABS
Variable Interest Entity
Carrying value of exposure to loss	9,075	10,657
Assets | CDO
Variable Interest Entity
Carrying value of exposure to loss	2,163	1,384
Assets | MTOB
Variable Interest Entity
Carrying value of exposure to loss	56	48
Assets | OSF
Variable Interest Entity
Carrying value of exposure to loss	1,185	1,202
Assets | Other
Variable Interest Entity
Carrying value of exposure to loss	4,765	4,914
Debt and Equity Interests | MABS
Variable Interest Entity
Maximum exposure to loss	9,075	10,657
Carrying value of exposure to loss	9,075	10,657
Debt and Equity Interests | Residential Mortgage
Variable Interest Entity
Maximum exposure to loss	782	1,272
Debt and Equity Interests | Commercial Mortgage
Variable Interest Entity
Maximum exposure to loss	1,934	2,331
Debt and Equity Interests | U.S. Agency CMO
Variable Interest Entity
Maximum exposure to loss	3,150	3,439
Debt and Equity Interests | Other Consumer or Commercial Loans
Variable Interest Entity
Maximum exposure to loss	3,209	3,615
Debt and Equity Interests | CDO
Variable Interest Entity
Maximum exposure to loss	2,163	1,384
Carrying value of exposure to loss	2,163	1,384
Debt and Equity Interests | MTOB
Variable Interest Entity
Maximum exposure to loss	81	80
Carrying value of exposure to loss	51	43
Debt and Equity Interests | OSF
Variable Interest Entity
Maximum exposure to loss	1,589	1,628
Carrying value of exposure to loss	1,185	1,202
Debt and Equity Interests | Other
Variable Interest Entity
Maximum exposure to loss	4,654	4,730
Carrying value of exposure to loss	4,654	4,730
Net Derivative and Other Contracts | MABS
Variable Interest Entity
Maximum exposure to loss	0	0
Carrying value of exposure to loss	0	0
Net Derivative and Other Contracts | CDO
Variable Interest Entity
Maximum exposure to loss	0	0
Carrying value of exposure to loss	0	0
Net Derivative and Other Contracts | MTOB
Variable Interest Entity
Maximum exposure to loss	3,367	3,333
Carrying value of exposure to loss	5	5
Net Derivative and Other Contracts | OSF
Variable Interest Entity
Maximum exposure to loss	0	0
Carrying value of exposure to loss	0	0
Net Derivative and Other Contracts | Other
Variable Interest Entity
Maximum exposure to loss	2,317	1,686
Carrying value of exposure to loss	111	184
Commitments, Guarantees and Other | MABS
Variable Interest Entity
Maximum exposure to loss	882	1,214
Commitments, Guarantees and Other | CDO
Variable Interest Entity
Maximum exposure to loss	902	668
Commitments, Guarantees and Other | MTOB
Variable Interest Entity
Maximum exposure to loss	0	0
Commitments, Guarantees and Other | OSF
Variable Interest Entity
Maximum exposure to loss	161	164
Commitments, Guarantees and Other | Other
Variable Interest Entity
Maximum exposure to loss	$ 327	$ 433

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Variable Interest Entities and Securitization Activities (Transfers of Assets with Continuing Involvement 1) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Variable Interest Entity
Derivative assets (fair value)	$ 33,148	$ 30,813
Derivative liabilities (fair value)	25,986	26,695
SPE
Variable Interest Entity
Retained interests	1,252	988
Interests purchased in the secondary market (fair value)	271	619
Derivative assets (fair value)	191	227
Derivative liabilities (fair value)	119	85
SPE | Investment Grade
Variable Interest Entity
Retained interests	836	411
Interests purchased in the secondary market (fair value)	183	533
SPE | Non-investment Grade
Variable Interest Entity
Retained interests	416	577
Interests purchased in the secondary market (fair value)	88	86
SPE | RML
Variable Interest Entity
SPE assets (UPB)	14,978	15,555
Retained interests	1	1
Interests purchased in the secondary market (fair value)	16	16
Derivative assets (fair value)	0	1
Derivative liabilities (fair value)	0	0
SPE | RML | Investment Grade
Variable Interest Entity
Retained interests	0	0
Interests purchased in the secondary market (fair value)	0	0
SPE | RML | Non-investment Grade
Variable Interest Entity
Retained interests	1	1
Interests purchased in the secondary market (fair value)	16	16
SPE | CML
Variable Interest Entity
SPE assets (UPB)	59,607	62,744
Retained interests	431	391
Interests purchased in the secondary market (fair value)	169	160
Derivative assets (fair value)	0	0
Derivative liabilities (fair value)	0	0
SPE | CML | Investment Grade
Variable Interest Entity
Retained interests	324	293
Interests purchased in the secondary market (fair value)	112	94
SPE | CML | Non-investment Grade
Variable Interest Entity
Retained interests	107	98
Interests purchased in the secondary market (fair value)	57	66
SPE | U.S. Agency CMO
Variable Interest Entity
SPE assets (UPB)	14,751	11,612
Retained interests	825	407
Interests purchased in the secondary market (fair value)	71	439
Derivative assets (fair value)	0	0
Derivative liabilities (fair value)	0	0
SPE | U.S. Agency CMO | Investment Grade
Variable Interest Entity
Retained interests	825	407
Interests purchased in the secondary market (fair value)	71	439
SPE | U.S. Agency CMO | Non-investment Grade
Variable Interest Entity
Retained interests	0	0
Interests purchased in the secondary market (fair value)	0	0
SPE | CLN and Other
Variable Interest Entity
SPE assets (UPB)	16,823	17,060
Retained interests	313	482
Interests purchased in the secondary market (fair value)	15	4
Derivative assets (fair value)	191	226
Derivative liabilities (fair value)	119	85
SPE | CLN and Other | Investment Grade
Variable Interest Entity
Retained interests	5	4
Interests purchased in the secondary market (fair value)	0	0
SPE | CLN and Other | Non-investment Grade
Variable Interest Entity
Retained interests	308	478
Interests purchased in the secondary market (fair value)	$ 15	$ 4

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Variable Interest Entities and Securitization Activities (Transfers of Assets with Continuing Involvement 2) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Variable Interest Entity
Derivative assets	$ 33,148	$ 30,813
Derivative liabilities	25,986	26,695
SPE
Variable Interest Entity
Retained interests	1,252	988
Interests purchased in the secondary market (fair value)	271	619
Derivative assets	191	227
Derivative liabilities	119	85
SPE | Investment Grade
Variable Interest Entity
Retained interests	836	411
Interests purchased in the secondary market (fair value)	183	533
SPE | Non-investment Grade
Variable Interest Entity
Retained interests	416	577
Interests purchased in the secondary market (fair value)	88	86
SPE | Level 2
Variable Interest Entity
Retained interests	844	429
Interests purchased in the secondary market (fair value)	234	588
Derivative assets	50	78
Derivative liabilities	114	81
SPE | Level 2 | Investment Grade
Variable Interest Entity
Retained interests	831	407
Interests purchased in the secondary market (fair value)	182	531
SPE | Level 2 | Non-investment Grade
Variable Interest Entity
Retained interests	13	22
Interests purchased in the secondary market (fair value)	52	57
SPE | Level 3
Variable Interest Entity
Retained interests	408	559
Interests purchased in the secondary market (fair value)	37	31
Derivative assets	141	149
Derivative liabilities	5	4
SPE | Level 3 | Investment Grade
Variable Interest Entity
Retained interests	5	4
Interests purchased in the secondary market (fair value)	1	2
SPE | Level 3 | Non-investment Grade
Variable Interest Entity
Retained interests	403	555
Interests purchased in the secondary market (fair value)	$ 36	$ 29

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Variable Interest Entities and Securitization Activities (Proceeds from New Securitization Transactions and Sales of Loans) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Special Purpose Entities
Transfer of Financial Assets Accounted for as Sales
Proceeds from new securitization transactions	$ 6,134	$ 5,997
Proceeds from retained interests in securitization transactions	481	430
CLO SPEs | Corporate Loans
Transfer of Financial Assets Accounted for as Sales
Proceeds from sale of loans	$ 94	$ 179

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Variable Interest Entities and Securitization Activities (Assets Sold with Retained Exposure) (Details) - Bilateral OTC - Equity Derivatives - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Transfer of Financial Assets Accounted for as Sales
Carrying value of assets derecognized at the time of sale and gross cash proceeds	$ 26,800	$ 19,115
Fair value of assets sold	26,566	19,138
Fair value of derivative assets recognized in the balance sheets	2	176
Fair value of derivative liabilities recognized in the balance sheets	$ 236	$ 153

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Variable Interest Entities and Securitization Activities (Failed Sales) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Failed Sales
Assets, carrying value	$ 710	$ 552
Liabilities, carrying value	$ 710	$ 552

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Regulatory Requirements (Narrative) (Details)	3 Months Ended
	Mar. 31, 2018
Regulatory Requirements
Description of regulatory requirements on capital adequacy	In addition to the minimum risk-based capital ratio requirements, by 2019 the Firm will be subject to the following buffers: A greater than 2.5% Common Equity Tier 1 capital conservation buffer; The Common Equity Tier 1 G-SIB capital surcharge, currently at 3%; and Up to a 2.5% Common Equity Tier 1 CCyB, currently set by U.S. banking agencies at zero.
Description of possible effects of noncompliance	In 2017 and 2018, each of the buffers is 50% and 75%, respectively, of the 2019 requirement noted above. Failure to maintain the buffers will result in restrictions on the Firm’s ability to make capital distributions, including the payment of dividends and the repurchase of stock, and to pay discretionary bonuses to executive officers.

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Regulatory Requirements (Capital Measures) (Details) - Standardized Approach Transitional Rules - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Amount
Common Equity Tier 1 capital	$ 60,568	$ 61,134
Tier 1 capital	69,213	69,938
Total capital	79,363	80,275
Total RWA	390,390	369,578
Tier 1 leverage	69,213	69,938
Adjusted average assets	846,868	$ 842,270
SLR	69,213
Supplementary leverage exposure	$ 1,091,518
Ratio
Common Equity Tier 1 capital	15.50%	16.50%
Tier 1 capital	17.70%	18.90%
Total capital	20.30%	21.70%
Tier 1 leverage	8.20%	8.30%
SLR	6.30%
Required Ratio
Common Equity Tier 1 capital	8.60%	7.30%
Tier 1 capital	10.10%	8.80%
Total capital	12.10%	10.80%
Tier 1 leverage	4.00%	4.00%
SLR	5.00%

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Regulatory Requirements (U.S. Bank Subsidiaries' Regulatory Capital and Capital Ratios) (Details) - Standardized Approach Transitional Rules - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Amount
Common Equity Tier 1 capital	$ 60,568	$ 61,134
Tier 1 capital	69,213	69,938
Total capital	79,363	80,275
Tier 1 leverage	$ 69,213	$ 69,938
Ratio
Common Equity Tier 1 capital	15.50%	16.50%
Tier 1 capital	17.70%	18.90%
Total capital	20.30%	21.70%
Tier 1 leverage	8.20%	8.30%
SLR	6.30%
Required Ratio
SLR	5.00%
MSBNA
Amount
Common Equity Tier 1 capital	$ 15,514	$ 15,196
Tier 1 capital	15,514	15,196
Total capital	15,785	15,454
Tier 1 leverage	$ 15,514	$ 15,196
Ratio
Common Equity Tier 1 capital	19.70%	20.50%
Tier 1 capital	19.70%	20.50%
Total capital	20.10%	20.80%
Tier 1 leverage	11.80%	11.80%
SLR	9.00%
Required Ratio
Common Equity Tier 1 capital	6.50%	6.50%
Tier 1 capital ratio	8.00%	8.00%
Total capital ratio	10.00%	10.00%
Tier 1 leverage ratio	5.00%	5.00%
SLR	6.00%
MSPBNA
Amount
Common Equity Tier 1 capital	$ 6,382	$ 6,215
Tier 1 capital	6,382	6,215
Total capital	6,425	6,258
Tier 1 leverage	$ 6,382	$ 6,215
Ratio
Common Equity Tier 1 capital	24.20%	24.40%
Tier 1 capital	24.20%	24.40%
Total capital	24.40%	24.60%
Tier 1 leverage	9.70%	9.70%
SLR	9.30%
Required Ratio
Common Equity Tier 1 capital	6.50%	6.50%
Tier 1 capital ratio	8.00%	8.00%
Total capital ratio	10.00%	10.00%
Tier 1 leverage ratio	5.00%	5.00%
SLR	6.00%

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Regulatory Requirements (Broker-Dealer Regulatory Capital Requirements) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
MS&Co.
Regulatory Requirements
Net capital	$ 12,661	$ 10,142
Excess net capital	10,303	8,018
MSSB LLC
Regulatory Requirements
Net capital	2,919	2,567
Excess net capital	$ 2,759	$ 2,400

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Total Equity (Dividends and Share Repurchases) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Mar. 31, 2017
Share Repurchase Program
Repurchases of common stock	$ 1,250			$ 750
Capital Plans
Dividends declared per common share	$ 0.25			$ 0.2
2017 Capital Plan
Capital Plans
Authorized repurchase amount of outstanding common stock	$ 5,000
Stock repurchase program start date	Jul. 01, 2017
Stock repurchase program expiration date	Jun. 30, 2018
Dividends declared per common share	$ 0.25	$ 0.25	$ 0.25
2016 Capital Plan
Capital Plans
Authorized repurchase amount of outstanding common stock	$ 3,500

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Total Equity (Preferred Stock General Disclosure) (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Total Equity
Preferred stock dividends declared	$ 93	$ 90
Preferred stock shares authorized	30

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Total Equity (Preferred Stock Outstanding) (Details) - USD ($) $ / shares in Units, $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Class of Stock
Preferred stock carrying value	$ 8,520	$ 8,520
Series A
Class of Stock
Preferred stock shares outstanding	44,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 1,100	1,100
Series C
Class of Stock
Preferred stock shares outstanding	519,882
Liquidation preference per share	$ 1,000
Preferred stock carrying value	$ 408	408
Series C | MUFG
Class of Stock
Preferred stock shares issued	1,160,791
Preferred stock aggregate purchase price	$ 911
Preferred stock redemption, shares	640,909
Preferred stock redemption amount	$ 503
Preferred stock converted to common shares	$ 705
Series E
Class of Stock
Preferred stock shares outstanding	34,500
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 862	862
Series F
Class of Stock
Preferred stock shares outstanding	34,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 850	850
Series G
Class of Stock
Preferred stock shares outstanding	20,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 500	500
Series H
Class of Stock
Preferred stock shares outstanding	52,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 1,300	1,300
Series I
Class of Stock
Preferred stock shares outstanding	40,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 1,000	1,000
Series J
Class of Stock
Preferred stock shares outstanding	60,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 1,500	1,500
Series K
Class of Stock
Preferred stock shares outstanding	40,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 1,000	$ 1,000

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Total Equity (AOCI) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cumulative adjustment for accounting changes	$ (131)	$ 10
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(3,060)	(2,643)
Cumulative adjustment for accounting changes	(437)
OCI during the period	91	193
Ending balance	(3,406)	(2,450)
Foreign Currency Translation Adjustments
Beginning balance	(767)	(986)
Cumulative adjustment for accounting changes	(8)
OCI during the period	60	107
Ending balance	(715)	(879)
AFS Securities
Beginning balance	(547)	(588)
Cumulative adjustment for accounting changes	(111)
OCI during the period	(410)	84
Ending balance	(1,068)	(504)
Pension, Postretirement and Other
Beginning balance	(591)	(474)
Cumulative adjustment for accounting changes	(124)
OCI during the period	5	0
Ending balance	(710)	(474)
DVA
Beginning balance	(1,155)	(595)
Cumulative adjustment for accounting changes	(194)
OCI during the period	436	2
Ending balance	$ (913)	$ (593)

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Total Equity (Components of Period Changes in OCI ) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Pre-tax Gain (Loss): Foreign Currency Translation Adjustments
OCI activity	$ 78	$ 43
Reclassified to earnings	0	0
Net OCI	78	43
Pre-tax Gain (Loss): Change in Net Unrealized Gains (Losses) on AFS Securities
OCI activity	(535)	137
Reclassified to earnings	0	(2)
Net OCI	(535)	135
Pre-tax Gain (Loss): Pension, Postretirement and Other
OCI activity	0
Reclassified to earnings	6
Net OCI	6
Pre-tax Gain (Loss): Change in Net DVA
OCI activity	580	7
Reclassified to earnings	15	4
Net OCI	595	11
Income Tax Benefit (Provision): Foreign Currency Translation Adjustments
OCI activity	39	107
Reclassified to earnings	0	0
Net OCI	39	107
Income Tax Benefit (Provision): Change in Net Unrealized Gains (Losses) on AFS Securities
OCI activity	125	(52)
Reclassified to earnings	0	1
Net OCI	125	(51)
Income Tax Benefit (Provision): Pension, Postretirement and Other
OCI activity	0
Reclassified to earnings	(1)
Net OCI	(1)
Income Tax Benefit (Provision): Change in Net DVA
OCI activity	(140)	(1)
Reclassified to earnings	(4)	(1)
Net OCI	(144)	(2)
After-tax Gain (Loss): Foreign Currency Translation Adjustments
OCI activity	117	150
Reclassified to earnings	0	0
Net OCI	117	150
After-tax Gain (Loss): Change in Net Unrealized Gains (Losses) on AFS Securities
OCI activity	(410)	85
Reclassified to earnings	0	(1)
Net OCI	(410)	84
After-tax Gain (Loss): Pension, Postretirement and Other
OCI activity	0
Reclassified to earnings	5
Net OCI	5	0
After-tax Gain (Loss): Change in Net DVA
OCI activity	440	6
Reclassified to earnings	11	3
Net OCI	451	9
Non-controlling Interests
After-tax Gain (Loss): Foreign Currency Translation Adjustments
OCI activity	57	43
Reclassified to earnings	0	0
Net OCI	57	43
After-tax Gain (Loss): Change in Net Unrealized Gains (Losses) on AFS Securities
OCI activity	0	0
Reclassified to earnings	0	0
Net OCI	0	0
After-tax Gain (Loss): Pension, Postretirement and Other
OCI activity	0
Reclassified to earnings	0
Net OCI	0
After-tax Gain (Loss): Change in Net DVA
OCI activity	15	7
Reclassified to earnings	0	0
Net OCI	15	7
Net
After-tax Gain (Loss): Foreign Currency Translation Adjustments
OCI activity	60	107
Reclassified to earnings	0	0
Net OCI	60	107
After-tax Gain (Loss): Change in Net Unrealized Gains (Losses) on AFS Securities
OCI activity	(410)	85
Reclassified to earnings	0	(1)
Net OCI	(410)	84
After-tax Gain (Loss): Pension, Postretirement and Other
OCI activity	0
Reclassified to earnings	5
Net OCI	5
After-tax Gain (Loss): Change in Net DVA
OCI activity	425	(1)
Reclassified to earnings	11	3
Net OCI	$ 436	$ 2

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Total Equity (Cumulative Adjustments to Retained Earnings) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cumulative adjustment for accounting changes	$ (131)	$ 10
Retained Earnings
Cumulative adjustment for accounting changes	306	(35)
Retained Earnings | Revenue from Contracts with Customers
Cumulative adjustment for accounting changes	(32)
Retained Earnings | Derivatives and Hedging-Targeted Improvements to Accounting for Hedging Activities
Cumulative adjustment for accounting changes	(99)
Retained Earnings | Reclassification of Certain Tax Effects from AOCI
Cumulative adjustment for accounting changes	443
Retained Earnings | Improvements to Employee Share-Based Payment Accounting
Cumulative adjustment for accounting changes		(30)
Retained Earnings | Intra-Entity Transfers of Assets Other Than Inventory
Cumulative adjustment for accounting changes		$ (5)
Retained Earnings | Other
Cumulative adjustment for accounting changes	$ (6)

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Earnings per Common Share (Calculation of Basic and Diluted EPS) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Basic EPS
Income from continuing operations	$ 2,706	$ 1,993
Income (loss) from discontinued operations	(2)	(22)
Net income	2,704	1,971
Net income applicable to noncontrolling interests	36	41
Net income applicable to Morgan Stanley	2,668	1,930
Preferred stock dividends and other	93	90
Earnings applicable to Morgan Stanley common shareholders	$ 2,575	$ 1,840
Weighted average common shares outstanding	1,740	1,801
Earnings per basic common share
Income from continuing operations	$ 1.48	$ 1.03
Income (loss) from discontinued operations	0	(0.01)
Earnings per basic common share	$ 1.48	$ 1.02
Diluted EPS
Earnings applicable to Morgan Stanley common shareholders	$ 2,575	$ 1,840
Weighted average common shares outstanding	1,740	1,801
Effect of dilutive securities:
Stock options and RSUs	31	41
Weighted average common shares outstanding and common stock equivalents	1,771	1,842
Earnings per diluted common share
Income from continuing operations	$ 1.46	$ 1.01
Income (loss) from discontinued operations	(0.01)	(0.01)
Earnings per diluted common share	$ 1.45	$ 1
Weighted average antidilutive RSUs and stock options (excluded from the computation of diluted EPS)	1	0

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Interest Income and Interest Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Interest income
Investment securities	$ 424	$ 326
Loans	938	748
Securities purchased under agreements to resell and Securities borrowed	215	(18)
Trading assets, net of Trading liabilities	540	463
Customer receivables and Other	743	446
Total Interest income	2,860	1,965
Interest expense
Deposits	159	11
Borrowings	1,138	1,022
Securities sold under agreements to repurchase and Securities loaned	402	248
Customer payables and Other	186	(87)
Total interest expense	1,885	1,194
Net interest	$ 975	$ 771

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Employee Benefit Plans (Net Periodic Benefit Expense (Income)) (Details) - Pension Plans - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Components of Net Periodic Benefit Expense (Income)
Service cost, benefits earned during the period	$ 4	$ 4
Interest cost on projected benefit obligation	34	37
Expected return on plan assets	(28)	(29)
Net amortization of prior service credit	0	(4)
Net amortization of actuarial loss	6	4
Net periodic benefit expense (income)	$ 16	$ 12

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Segment and Geographic Information (Selected Financial Information by Business Segment) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Segment Reporting Information
Total non-interest revenues	$ 10,102	$ 8,974
Interest income	2,860	1,965
Interest expense	1,885	1,194
Net interest	975	771
Net revenues	11,077	9,745
Income from continuing operations before income taxes	3,420	2,808
Provision for income taxes	714	815
Income from continuing operations	2,706	1,993
Income (loss) from discontinued operations, net of income taxes	(2)	(22)
Net income	2,704	1,971
Net income (loss) applicable to noncontrolling interests	36	41
Net income applicable to Morgan Stanley	2,668	1,930
I/E
Segment Reporting Information
Total non-interest revenues	(116)	(77)
Interest income	(225)	(239)
Interest expense	(226)	(242)
Net interest	1	3
Net revenues	(115)	(74)
Income from continuing operations before income taxes	0	2
Provision for income taxes	0	0
Income from continuing operations	0	2
Income (loss) from discontinued operations, net of income taxes	0	0
Net income	0	2
Net income (loss) applicable to noncontrolling interests	0	0
Net income applicable to Morgan Stanley	0	2
IS
Segment Reporting Information
Total non-interest revenues	6,195	5,379
Interest income	1,804	1,124
Interest expense	1,899	1,351
Net interest	(95)	(227)
Net revenues	6,100	5,152
Income from continuing operations before income taxes	2,112	1,730
Provision for income taxes	449	459
Income from continuing operations	1,663	1,271
Income (loss) from discontinued operations, net of income taxes	(2)	(22)
Net income	1,661	1,249
Net income (loss) applicable to noncontrolling interests	34	35
Net income applicable to Morgan Stanley	1,627	1,214
WM
Segment Reporting Information
Total non-interest revenues	3,305	3,064
Interest income	1,280	1,079
Interest expense	211	85
Net interest	1,069	994
Net revenues	4,374	4,058
Income from continuing operations before income taxes	1,160	973
Provision for income taxes	246	326
Income from continuing operations	914	647
Income (loss) from discontinued operations, net of income taxes	0	0
Net income	914	647
Net income (loss) applicable to noncontrolling interests	0	0
Net income applicable to Morgan Stanley	914	647
IM
Segment Reporting Information
Total non-interest revenues	718	608
Interest income	1	1
Interest expense	1	0
Net interest	0	1
Net revenues	718	609
Income from continuing operations before income taxes	148	103
Provision for income taxes	19	30
Income from continuing operations	129	73
Income (loss) from discontinued operations, net of income taxes	0	0
Net income	129	73
Net income (loss) applicable to noncontrolling interests	2	6
Net income applicable to Morgan Stanley	$ 127	$ 67

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Segment and Geographic Information (Assets by Business Segment) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Segment Reporting Information
Assets	$ 858,495	$ 851,733
Institutional Securities
Segment Reporting Information
Assets	674,785	664,974
Wealth Management
Segment Reporting Information
Assets	177,603	182,009
Investment Management
Segment Reporting Information
Assets	$ 6,107	$ 4,750

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Segment and Geographic Information (Additional Information - Investment Management) (Details) - Investment Management - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Segment Reporting Information
Net cumulative unrealized performance-based fees at risk of reversing	$ 441		$ 442
Fee waivers	$ 18	$ 23

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Segment and Geographic Information (Net Revenues by Region) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Segment Reporting Information
Net revenues	$ 11,077	$ 9,745
Americas
Segment Reporting Information
Net revenues	8,018	7,088
EMEA
Segment Reporting Information
Net revenues	1,708	1,489
Asia
Segment Reporting Information
Net revenues	$ 1,351	$ 1,168

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Customer Contract Revenue Recognition (Customer Contract Renenues) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Disaggregation of Revenue
Revenues from contracts with customers	$ 5,910
Revenue recognized from services performed over multiple periods	902
Americas
Disaggregation of Revenue
Revenues from contracts with customers	4,738
EMEA
Disaggregation of Revenue
Revenues from contracts with customers	622
Asia
Disaggregation of Revenue
Revenues from contracts with customers	550
I/E
Disaggregation of Revenue
Revenues from contracts with customers	(129)
IS
Disaggregation of Revenue
Revenues from contracts with customers	2,221
WM
Disaggregation of Revenue
Revenues from contracts with customers	3,192
IM
Disaggregation of Revenue
Revenues from contracts with customers	626
Investment Banking
Disaggregation of Revenue
Revenues from contracts with customers	1,429
Investment Banking | I/E
Disaggregation of Revenue
Revenues from contracts with customers	(19)
Investment Banking | IS
Disaggregation of Revenue
Revenues from contracts with customers	1,308
Investment Banking | WM
Disaggregation of Revenue
Revenues from contracts with customers	140
Investment Banking | IM
Disaggregation of Revenue
Revenues from contracts with customers	0
Commissions and Fees
Disaggregation of Revenue
Revenues from contracts with customers	1,173
Commissions and Fees | I/E
Disaggregation of Revenue
Revenues from contracts with customers	(69)
Commissions and Fees | IS
Disaggregation of Revenue
Revenues from contracts with customers	744
Commissions and Fees | WM
Disaggregation of Revenue
Revenues from contracts with customers	498
Commissions and Fees | IM
Disaggregation of Revenue
Revenues from contracts with customers	0
Asset Management
Disaggregation of Revenue
Revenues from contracts with customers	3,192
Asset Management | I/E
Disaggregation of Revenue
Revenues from contracts with customers	(39)
Asset Management | IS
Disaggregation of Revenue
Revenues from contracts with customers	110
Asset Management | WM
Disaggregation of Revenue
Revenues from contracts with customers	2,495
Asset Management | IM
Disaggregation of Revenue
Revenues from contracts with customers	626
Ohter Customer Contract Revenues
Disaggregation of Revenue
Revenues from contracts with customers	116
Ohter Customer Contract Revenues | I/E
Disaggregation of Revenue
Revenues from contracts with customers	(2)
Ohter Customer Contract Revenues | IS
Disaggregation of Revenue
Revenues from contracts with customers	59
Ohter Customer Contract Revenues | WM
Disaggregation of Revenue
Revenues from contracts with customers	59
Ohter Customer Contract Revenues | IM
Disaggregation of Revenue
Revenues from contracts with customers	$ 0

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Customer Contract Revenue Recognition (Change in Revenue) (Details) - Revenue from Contracts with Customers $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Change in Revenue as a Result of Application of the New Revenue Recognition Standard
Change in revenues	$ 83
Increase to net revenues and noncompensation expenses	79
Investment Banking
Change in Revenue as a Result of Application of the New Revenue Recognition Standard
Change in revenues	60
Commissions and Fees
Change in Revenue as a Result of Application of the New Revenue Recognition Standard
Change in revenues	2
Asset Management
Change in Revenue as a Result of Application of the New Revenue Recognition Standard
Change in revenues	9
Ohter Customer Contract Revenues
Change in Revenue as a Result of Application of the New Revenue Recognition Standard
Change in revenues	12
I/E
Change in Revenue as a Result of Application of the New Revenue Recognition Standard
Increase to net revenues and noncompensation expenses	(16)
Institutional Securities
Change in Revenue as a Result of Application of the New Revenue Recognition Standard
Increase to net revenues and noncompensation expenses	72
Institutional Securities | Advisory
Change in Revenue as a Result of Application of the New Revenue Recognition Standard
Change in revenues	15
Institutional Securities | Underwriting
Change in Revenue as a Result of Application of the New Revenue Recognition Standard
Change in revenues	45
Investment Management
Change in Revenue as a Result of Application of the New Revenue Recognition Standard
Increase to net revenues and noncompensation expenses	$ 23

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Customer Contract Revenue Recognition (Balance Sheet Amounts) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Jan. 01, 2018
Customer and Other Receivables Balance Related to Contracts with Customers
Customer and other receivables	$ 2,697	$ 2,805
Contract Liabilities Rollforward
Contract liabilities, beginning balance	155
Recognized contract liabilities	184
Contract liabilities recognized into revenue	(160)
Contract liabilities, ending balance	$ 179

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Customer Contract Revenue Recognition (Future Expected Revenues) (Details) - Ohter Customer Contract Revenues $ in Millions	Mar. 31, 2018 USD ($)
Future Expected Revenues
2018	$ 89
2019	118
2020	95
Thereafter	310
Total	$ 612